There are several ways to deal with this issue. If you want to keep your home, you can do a Chapter 13 bankruptcy and pay back the money you are behind over the next 3-5 years. It is always best to do an arrearage cure since if you pay the required trustee payment and resume your mortgage going forward, then you will be able to save your home.
If you cannot afford to pay back the arrears since the trustee payment would be excessive then you always have the opportunity to seek a loan modification. Please note these are voluntary agreements by the mortgage company and no Judge can force the mortgage company to give you a loan modification. Some of our clients get them while others do not. There is never any guarantee. This is why it is much safer to do a plan such as an arrearage cure.
If you just want to buy time and prevent a foreclosure, you can always do a sale plan. However, if your home is under water you would have to do a short sale which gives you absolutely no benefit unless you live in a condominium and have post petition condominium fees.
If your home has no equity and you just want to get a fresh start, then it may be best to just surrender the property and save up money for a new home that you can afford. If you qualify, it is best to file a Chapter 7 and stay in the home until they are close to sheriff sale. Most clients make the mistake of vacating the premises which can cause all types of vandalism. Also, it is advisable to save up for a new home or apartment. If you need to file a Chapter 13 for other reasons then you can just surrender the real estate in the Chapter 13 plan and you will be discharged of the debt once you pay off the plan.
If you have any questions concerning this matter or any other matter contact TAIEBLAW at 856-235-4994 or visit our website at TAIEBLAW.COM, and schedule a FREE initial consultation.
Steven N. Taieb, Esq. has been a South Jersey Bankruptcy Attorney for over 33 years and is board certified in consumer bankruptcy law by The American Board of Certification which is accredited by The American Bar Association.