You have received demand letters from your mortgage company informing you that you are months late on your mortgage, or perhaps, that you owe additional sums to your escrow account.  Finally, you have received a notice that your whole loan balance has been "accelerated," or worse, you receive a "Notice Of Foreclosure" or "Substitute Trustee's Sale."  You need to act promptly, the time for delay is over.  In many cases, your home can be saved.  First, determine why you got behind in the payments.  Was it a temporary expense that put you behind?  Was is a change of your employment?  Chapter 13 Bankruptcy will allow you as many as 5 years to catch up on your mortgage arrears and save your home.  In Chapter 13, you will create a "plan or reorganization" or "plan" which constitutes a proposal concerning how you plan to manage your debts and cure the arrears.  In the plan, you show the Bankruptcy Court how you will pay your underlying monthly mortgage note, your household expenses, your car notes, and perhaps lay aside a little for emergencies.  Any remaining monthly income will be used to catch up on the back mortgage payments.  If there is any money after making these catch up payments, then that money will go to pay "unsecured debts," usually credit card and medical bills.

In sum, a simple test to determine whether a Chapter 13 can help save the home is this: Ask yourself: "Can I make my current mortgage payments and catch up on the arrearages within 60 months?"  If the answer is "yes," then please allow us to assist you. Chapter 13 can save your home!

Currently there are many news stories about inflation in the United States as well as abroad. An individual who is deeply indebted might ask: "What effect will inflation have on my bankruptcy?" If you are in a Chapter 7 bankruptcy, the answer is "likely none." However, in a time of rapidly increasing wages (definitely not here yet) which often accompanies inflation, then wage inflation may affect your eligibility under Section 707(b) of the Bankruptcy Code. In other words, in a high inflation environment you might be considered "too rich" to file a Chapter 7! But this is unlikely in most inflation scenarios.  In a Chapter 13 payout plan, the effect of inflation does matter. In a Chapter 13, the bankruptcy code imposes a "best interests of creditors test" commonly referred to as the "more than test." What this means is that your payout to unsecured (noncollateralized) creditors in a Chapter 13 plan must be "more than" what they would have received had you filed a Chapter 7 liquidation. In other words, assuming that your estate were liquidated in a Chapter 7, and each creditor were to receive ten cents on each dollar owed them, then, in a Chapter 13, you must pay at last that much plus a penny, to meet the best interests of creditors test. Inflation affects this calculation by increasing the fair market value (in dollar terms) of your non-exempt property. In simpler terms, if you had non-exempt property worth $10,000.00, then you must pay $10,000.01 into your Chapter 13 bankruptcy. If that property is increasing in value by inflation–or by hyperinflation–then that $10,000.00 fair market value might soon increase to $15,000.00, $20,000.00, or more, in a very short time.