Law Office of Timothy E. Wilfong, LLC

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Law Office of Timothy E. Wilfong, LLC
20 S. Main Street, Phoenixville, PA 19460

Bankruptcy & Foreclosure
How does filing Chapter 13 Bankruptcy help stop a Foreclosure against your Personal Residence?

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Law Office of Timothy Wilfong

21 South Main Street

Phoenixville, PA 19460


How does filing Chapter 13 Bankruptcy help stop a Foreclosure against your home?

If your mortgage company has started a foreclosure action, there are several key strategies that can be employed to save your home.  First, a homeowner can hire an attorney to defend directly against the foreclosure lawsuit in the Court of Common Pleas, located in your County, by filing Preliminary Objections or an Answer with Affirmative Defenses.  Unfortunately, this type of representation may be expensive and, at the end of the day, only serves to delay the sheriff's sale, as opposed to saving the homeowner's personal residence. 

The second strategy is for the homeowner to apply for a loan modification.  There are many factors that a mortgage company will consider to determine if you qualify for a loan modification.  Some loan modification programs are government backed, such as HAMP, and other are private, which have different qualifications.  Unfortunately, when a homeowner attempts to apply for a loan modification they can feel as though the mortgage company is actually obstructing the process and they cannot make any headway.  Here are the following most likely scenarios as to why a loan modification was denied: (1) failure to send requested documents; (2) did not meet government or private loan modification qualifications; (3) sheriff's sale occurred before loan modification was reviewed or approved; and (4) problems with communicating with mortgage company.  


The third strategy for a homeowners to save their residence is filing a Chapter 13 Bankruptcy in order to rehabilitate the mortgage and cure the default. This approach works best for homeowners under the following circumstances. The typical reasons that homeowners may face foreclosure are because of an interruption in income either due to a loss of job or increased expenses, such as medical expenses.  Commonly, individuals who have overcome these obstacles, and who have found a new job or their health has improved, may find that they now have the income to make the monthly mortgage payment again.  When they contact their mortgage company, they find that in order to cure the mortgage default they must either: (1) pay the amount owed on the entire mortgage (i.e. somehow refinance the mortgage); (2) pay the entire amount of the arrears (missed payments); or (3) make a large lump sum payment of an arbitrary amount.  Obviously, most homeowners will not be in the position to meet any one of the mortgage company’s demands.

How Chapter 13 Bankruptcy helps is that it: (1) stays the foreclosure action; (2) allows homeowners in foreclosure to restart their mortgage payments; and (3) pay the arrears (missed payments) over a five year period.  As we discussed above, since the homeowner now has overcome their interruption in income, they now are able to make the monthly mortgage payment, plus the payment on the arrears, in which the monthly amount would be the total missed payments divided by 60 months.  A homeowner who completes this process and pays off their arrears through the Chapter 13 Payment Plan will cure the mortgage default and rehabilitate their mortgage loan.  

This is solely an overview and please schedule an appointment for a detailed analysis of your situation. 

Please call for a free, no obligation, initial consultation with a bankruptcy lawyer to evaluate your specific financial circumstances to see if it makes sense for you to file for Bankruptcy at (610) 935-5555.  To ask a question or schedule an appointment please click here.

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Law Office of

Timothy E. Wilfong, LLC

20 S. Main Street

Phoenixville, PA 19460

Phone-(610) 935-5555

Fax-(610) 680-3910