Frequenlty Asked Questions

About Bankruptcy Chapter 13

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What is the difference between Foreclosure or Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a federal court procedure for the deceleration and repayment of mortgage obligations along with the reduction or elimination of all other forms of debt. The filing of a Chapter 13 bankruptcy creates an immediate stop – known as an “automatic stay” – of the foreclosure process, halting a pending foreclosure and allowing for repayment of the past-due mortgage installments, and other debt obligations, over a three- to five-year time period. Chapter 13 bankruptcy will allow you to begin regularly scheduled monthly mortgage payments as if no previous default had ever occurred.

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What is an Automatic Stay?

The automatic stay will put an immediate stop to:

Any court actions
Any phone calls or contact
Wage garnishment
Bank levy
Property repossession
Attachments
Foreclosure
Lawsuits and judgments against you

The filing of a case in Connecticut will immediately stop all collection efforts on legal action in any state or jurisdiction throughout the country.

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What is a Chapter 13 Repayment Plan?

Chapter 13 bankruptcy is a court process that allows you to propose an affordable three- to five-year plan for mortgage solutions and reduction and repayment of any type of debt based upon your monthly ability to repay. Your repayment plan is prepared by an attorney in accordance with applicable law and your particular income and expenses. It is a customized plan that does not require the approval of your bank or your creditors. Only the correct Plan creates the correct solution.

Chapter 13 bankruptcy stops a foreclosure in any stage immediately and allows for the repayment of past-due mortgage payments over a three-to-five year period while allowing you to start making your regular monthly payments again as if no problem had occurred. It does not require the approval of your mortgage lender and will allow you to proceed even if your bank or servicing company or their attorneys don’t agree. Depending on the value of your home, it also allows for the removal of second mortgages and other liens.

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