Chapter 13 Bankruptcy: The Key to Saving Your Home
Video Transcribed: Good afternoon everybody, Edward Kelly, your OKC bankruptcy attorney here with the second in a series of five videos called How to Save My House with Chapter 13 Bankruptcy.
So in the first video, we talked about who this is for and the prerequisites for this to be a good solution for you. Number one, obviously your house is in trouble. You’re behind on your mortgage. Number two, your loan company won’t work with you. If they haven’t foreclosed on you, if you’ve got modification options, you should probably try those first before you get involved in a Chapter 13 bankruptcy. However, if you are behind, your mortgage company won’t work with you, and third, and maybe most important, you have the means to catch it up, then Chapter 13 is for you.
I gave a stern warning in the last video, you’ve got to be able to make your regular mortgage payment in a small percentage of what you’re behind. And I’m going to elaborate on that in this video.
Well, how much more? Okay, so Chapter 13 bankruptcy lasts anywhere from three to five years, or you can say 36 to 60 months. So if we say your mortgage payment is, let’s just say $1,000 just to make it easy, $1,000 a month, and let’s say that you’re $60,000 behind. Now that’s a lot more than usual, but it makes it a whole lot easier to do the math on it.
So 60 months is the longest you can do a Chapter 13. In many cases, if you’re just trying to save your house, you may be able to do as little as 36 months or three years. However, you’ve got to go long enough to pay it off entirely. So how do you calculate how much you’re going to have to pay? Well, you’ve got to make that regular mortgage payment, that $1,000, and then you’re going to have to pay 1 60th of what you’re behind.
So I used a nice easy $60,000. So in that example, what’s $60,000 divided by 60? Pretty easy, $1,000. So if you’re behind $60,000 in that five years or 60 months, you’ve got to catch it up entirely. So you’re going to have to pay $1,000 every month at a minimum in order to achieve that. So in that case, you’ve got to be able to come up with $2,000 a month. And your income needs to prove that. They’re not going to approve you unless you’ve got enough money to do it. Sometimes you can put in an outside contribution, even if you don’t have enough. If a family member is swearing they’re going to help you, we can put that in. But that’s how the math works.
Of course, you can go down from there. Are you $30,000 behind? Well, $500 a month in addition. So $1,000 and $500 is $1,500. In the first example, you’re paying $2,000 a month. If you’re $30,000 behind, you’re going to pay $1,500 a month total. You’ve got to be sure that you can do that. And so on, down, down, down. If you’re $15,000 behind, then $250 a month. So you catch the drift. So that’s how it works.
So this is kind of an extended summary. So if you’re behind on your mortgage, you’re in foreclosure or not in foreclosure, we’re going to talk more about that in the next video. The bank won’t work with you. There are no other means to do it, and you have the income to where you can pay the regular mortgage payment plus 1/60th of what you owe at the least. In Chapter 13, it’s going to work. The government gives the court that power to force the mortgage company to do it. So it’s a great solution if those factors are all met. So that’s video 2 in this series, How Can a Chapter 13 Help Me Save My House?
If you need further assistance or have any questions, you can always reach me, an Oklahoma chapter 13 bankruptcy lawyer, at oklahomacitybankruptcyattorney.pro or call me at (405) 563-7888