How Do I Save My House From Foreclosure and Bankruptcy?

Now in Chapter 13, on Personal Property, You Can Cram Down to Actual Value

Video Transcribed:  Oklahoma Bankruptcy Attorney Edward Kelley here, answering your Oklahoma bankruptcy questions with oklahomacitybankruptcyattorney.pro. Today, I’m going to go back over a topic I get a lot. How do I save my house from foreclosure and bankruptcy?

Well, in order to do so, you’ve got to do a chapter 13, not a chapter seven. Obviously you’re not going to liquidate when you’re trying to hold on to the property. So let’s say, for example, you are $10,000 behind.

Well, you know what, for argument’s sake, let’s say you’re 60,000 behind. That’ll make it a little easier. In your normal chapter 13, which, actually, due to COVID, can be extended a little bit longer to make it easier, up to 72 months, normally you have a 60-month maximum time to pay off all of your secured debt for property that you want to keep, if you follow me.

Your unsecured debt, doesn’t matter how much you pay. It’s only based on what you can pay, not what you owe. But on your secured debt, if you want to keep that collateral, if you let it go, then it becomes an unsecured debt. If you keep it, you’re going to have to pay it off. Now in chapter 13, on personal property, you can cram down to actual value. Doesn’t generally apply to homes.

So saving your house. You’re in an Oklahoma foreclosure. You’re 60,000 behind. Remember, you can save that home up until the sheriff’s sale’s confirmed. So let’s say the house has been sold at sheriff’s sale. There’s another step.

The creditor has to file that confirmation of sale order, obtain it from the judge and file a confirmation of sale order with the court. As long as you can get in there before that, you can stop that. So the sale is not the end of the process.

So let’s say your mortgage is 1000 a month, for argument’s sake. You owe 60,000 back. And it really doesn’t matter how far back it goes, as long as you can pay it over the life of your bankruptcy. So in that bankruptcy, you’re going to have to pay the regular $1000 mortgage, in many districts, through the plan.

Most of our districts, except in some circumstances. Plus 60 months. 60,000 yo. An additional thousand. We’ll pay that off over the life of the plan. So you’ve got to be able to pay 2000 a month. So a good chapter 13 plan is for somebody who can afford it.

So if circumstances have changed, now you can fix it. Usually the mortgage company is not working with you in any meaningful way at this point. File a 13. Stop them in their tracks. Pay that 2000 a month for five years, and then you’re back. So hope that helps. That’s how a 13 can save your house.