Stop Repossession

Personal bankruptcy can provide immediate debt relief through two main forms:
• Chapter 7 Bankruptcy
• Chapter 13 Bankruptcy

Serving the greater Detroit area, the Warren, MI law firm of BartNow can help you get immediate debt relief while protecting your important assets- such as your car and home- through Chapter 13 consumer bankruptcy. Also called a Wage Earner's Plan or Debt Consolidation Bankruptcy, Chapter 13 personal bankruptcy allows you to keep your home and car while paying off your debts over time from your own earned income.

Advantage of Keeping Your Home and Car
The principal advantage of Chapter 13 bankruptcy over Chapter 7 is that a homeowner in arrears on home mortgage payments will be able to save their home from foreclosure. Many people file Chapter 13 bankruptcy to protect assets in which they have significant equity that otherwise may be lost in Chapter 7 liquidation bankruptcy, including their home, business and car. Chapter 13 provides a way for people to immediately prevent foreclosures and repossessions, while catching up on debts.

Manageable Monthly Payments
Under Chapter 13, the bankruptcy court will approve a repayment plan that provides for the complete satisfaction of most unsecured and secured debts from future income rather than from the current sale of your important assets. The payments you make are structured so that you can meet all your living expenses first and then pay surplus income to creditors. A typical repayment plan lasts three to five years, during which you will make regular payments to a court-appointed trustee who then distributes your money to creditors according to the terms of your plan. Once you have completed this repayment plan, most of your remaining debts are discharged. In a Chapter 7 bankruptcy, some debts are not usually dischargeable, such as alimony, student loans, child support obligations, and certain taxes. A Chapter 13 Bankruptcy can be used to protect you from these creditors while forcing them to accept a repayment plan you can afford.

Prevent Home Foreclosure
The best way to avoid foreclosure is to prevent the filing of a Notice of Default. Lenders do not want to foreclose but will file a Notice of Default to protect their interests, if necessary. If you know you are unlikely to meet your mortgage obligation, the first thing you should do is call your lender.

Don't put it off, be embarrassed or ignore letters from your lender because those responses will make the situation worse, not better. Depending on your particular situation and hardship circumstances, here are some options your lender might propose to you:

Time to make up your payments. Lenders might agree to wait before taking legal action against you and let you work out a repayment plan that is affordable for you. This is called forbearance.

Forgiving a payment. If you can agree on a way that you will be current after missing a payment or two (without the means to pay it back), the lender might give you a break and waive your obligation. This is called debt forgiveness and rarely happens.

Spread out the missed payments over a longer term. For example, if your payment is, say, $1,200 a month, the lender might let you add $100 a month to each payment for a year until you are caught up. This is called a repayment plan.

Changing the terms of your loan. If your mortgage is an adjustable loan, the lender might freeze the interest rate before it increases or change the interest rate to a more manageable rate for you. A lender might also extend the amortization period. This is called a note modification.

Add the back payments to your loan balance. If you have sufficient equity and meet the lender's lending guidelines, the lender might increase your loan balance to include the back payments and re-amortize the loan. This is called a refinance.

Make a separate loan to you. Certain government loans contain provisions that let borrowers who meet specific criteria apply for another loan, which will pay back the missed payments. This is called a partial claim.

For more information on Michigan Bankruptcy, please visit: www.BartNow.com