CAN A BANKRUPTCY STOP MY HOUSE FROM BEING FORECLOSED ON IN ALABAMA?

3/5/2020

Can a bankruptcy stop my house from being foreclosed on in Alabama?

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Yes. You may be able to save your house from foreclosure by filing a Chapter 13 bankruptcy in Alabama. A Chapter 13 bankruptcy allows you to put your arrearage (the payments you have missed) in your Chapter 13 plan and pay them back over the term of your plan (usually 5 years). You will have to pay the entire amount of your arrearage back over this period of time. This in effect “catches up” your mortgage payments, keeping the mortgage company from foreclosing.

Other than allowing you to catch up your back payments the bankruptcy court cannot affect the terms of your mortgage. Therefore, beginning the month after you file for bankruptcy you will have to begin making your regular monthly mortgage payments.

This can be difficult since you were already missing payments and now you are to begin making your mortgage payments again plus a payment to the bankruptcy court. This will require some serious budgeting and discipline, but it will be very important for you to make both of these payments. While there may be some ways to prevent foreclosure if you miss payments post-petition (i.e. after your bankruptcy has been filed), it will be difficult. You will also have to maintain your homeowner’s insurance coverage.

To stop the foreclosure your bankruptcy will need to be filed prior to the foreclosure sale. The 2005 amendments to the bankruptcy laws have made the preparation of bankruptcy petitions much more time consuming. I would recommend you see an attorney immediately and not later than 1 week prior to the foreclosure sale.

The bottom line is while it may take some cutting back on other expenses, a Chapter 13 bankruptcy in Alabama can save your house from foreclosure.

Do you have questions or comments regarding this topic? Please email me.

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I am an attorney located in Cullman, AL. I practice extensively in the area of consumer bankruptcy law, that is, I file Chapter 7 and Chapter 13 bankruptcies for individuals. I handle cases all over North Alabama and have helped hundreds of clients through the bankruptcy process., I receive many referrals from former clients and their families and other attorneys. Why? Unlike other firms, I have a local office. If you are from out of town, we have the technology available to keep your traveling to a minimum. Also, unlike many firms, you will meet personally with an attorney, not a paralegal. An attorney will handle your case from start to finish. ,

You will be taken care of throughout the process. We will obtain your credit reports to ensure all your creditors are listed. We will assist you in preparing the forms and then obtain your credit counseling certificate which is required prior to filing bankruptcy for you. We will explain the pros and cons of filing for bankruptcy and the different types of bankruptcy. We will not pressure you into entering into a bankruptcy process that you do not understand. We will be with you side by side through the bankruptcy process. , We represent individuals and work hard to lead them out of the debt traps, through the maze of bankruptcy laws, and to the relief of a bankruptcy discharge.

I am a member of the National Association of Consumer Bankruptcy Attorneys, the American Bar Association, the American Association for Justice, the Alabama Bar Association, and the Alabama Association for Justice. I am a 1996 graduate of the University of Alabama School of Law. I also have a BA degree from the University of Alabama. The Law Office of Richard L. Collins is a federally designated Debt Relief Agency. Richard L. Collins helps clients file for bankruptcy protection under the laws of the United States. Alabama State Bar Disclaimer: No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.

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