Foreclosure bankruptcy question

[floridabank]

Hello everyone,

I am here on behalf of my mother who is about to turn 60 and is in a desperate situation.

About 5 years ago my 99 year old grandmother needed 24 hour care. My mother switched over to a part-time job and moved my grand mother in to provide her with that care. My grandmother had a nice amount of savings but we all thought her health will fail at any moment. Low and behold my grandmother is still kicking even though she still needs the 24 hour care.

Because of this my mother was put in a financial hole where she feel behind on her mortgage payments. She went to an attorney for a mortgage modification. After almost two years it was found that this attorney was doing nothing except delaying the foreclosure process instead of actually working on a modification. At this point my mother has fallen behind about 30k in mortgage and is facing foreclosure.. She can dip into her 401k to come current but that will empty out all of her savings. I am planning to move my wife and I into her house to help her get back on her feet.

An attorney friend of mine said that my mother may qualify for a chapter 13 which would save her 401k and the house. I am completely ignorant on this so I wanted to ask advice on this board.

She lives in Florida and her car is paid in full and she has a foreclosure on a small investment property that went sour during the mortgage collapse.

Does chapter 13 sound like a good idea and how can it help us?

Thanks so much in advance.

[despritfreya]

There is a ton of stuff on the site dealing with Chapter 13's.

Basically a Chapter 13 allows one to "cure" the pre petition arrears (missed payments) over 5 years period by making monthly payment to a bk Trustee (called a Plan payment). In addition to the Plan payment your mom would have to resume regular monthly mortgage payments. The Plan payment only provides for the missed payments. She must be able to afford to resume payments in addition.

If your mom has a 2nd mortgage and the property has no equity after consideration of the 1st, the Chapter 13 will allow her to strip off (remove) the lien and treat the 2nd as a general unsecured creditor.

This is just a start of what a 13 can do. Review as many threads on bkforum as you can and she should meet with several attnys before deciding what is best. Initial consultations are usually free.

Des.