These are tough financial times for many in Maryland. For some, the saving grace has been the foreclosure moratorium that allowed them to stay in their homes even if they could not pay their mortgage. Recently, the Federal Housing Administration has extended the foreclosure moratorium through February 28, 2021. However, it is still worthwhile to know what your options are for stopping foreclosure after the moratorium ends.
What is Chapter 13 bankruptcy?
One way that a person in Maryland may be able to stop the foreclosure process is by filing for Chapter 13 bankruptcy. Through Chapter 13, also known as a “wage earner’s plan” a court-approved three to five-year repayment plan will be established that allows a debtor to pay down many of the debts in a manageable and feasible manner through monthly installments. After the conclusion of the plan, many remaining debts will be discharged.
Stopping the foreclosure process
One advantage of the Chapter 13 bankruptcy process is that it allows debtors to save their home from foreclosure. When a debtor files for Chapter 13, the foreclosure process is halted. Then the debtor is given the opportunity to make good on delinquent mortgage payments over time, although they are still responsible for making mortgage payments that come due during the course of the Chapter 13 repayment plan.
Learn more about Chapter 13 bankruptcy
Homeowners in Maryland who fear they will be foreclosed upon when the current moratorium ends may want to learn more about Chapter 13 bankruptcy. Our firm’s website has more information about Chapter 13 bankruptcy that may be of use to those who are unable to pay their mortgage.