Mortgage Assistance or Chapter 13 Bankruptcy?

On Wednesday, February 21, 2007, I saw a story on WCNC News “The Investigators”, on the NBC station  in Charlotte NC.  It was about a man who lost his home to foreclosure after paying a mortgage assistance company to help him save it. 

The story was on a mortgage assistance company called “Mortgage Assistance of the Carolinas”, a company that is under investigation by the North Carolina Attorney General.  According to the article on the WCNC website, “After complaints from other consumers, the North Carolina attorney general took action calling Mortgage Assistance of the Carolinas fraudsters and prohibiting the company from asking for upfront fees. The AG’s office is currently suing the company. ” 

The story warned against using mortgage assistance companies, gave some suggestions for other workout options.  Sadly, the story never mentioned the power of Chapter 13 bankruptcy or Chapter 13’s ability to stop foreclosure.  By stopping the foreclosure and giving people time (up to five years) to catch up the missed payments, Chapter 13 gives many people a chance to save their home. 

The story was filmed one day after the foreclosure sale was held.  In North Carolina, the family whose home had been sold might still have been able to file a Chapter 13 and save their home, even though the house had sold!   There is a period of time after the sale has been held, but before the sale is finalized, that may allow someone to still file for Chapter 13 bankruptcy to save the property.

Following the advice of a mortgage assistance company may have been an expensive mistake, but Chapter 13 might have still saved that family’s home. 

Even though it doesn’t tell people about Chapter 13, the WCNC story still has good information about how people can be harmed by mortgage assistance companies.  You can read the article and watch the video at the WCNC website. 

You can also read more information about foreclosure assistance companies and foreclosures by going to an article on my blog:  Chapter 13 Or Mortgage Workout Assistance?

See also:  Claims That Bankruptcy Will Not Stop Foreclosure Are Not Only False, But Absurd;    Lie of the Day: “Bankruptcy Won’t Stop Foreclosure For Troubled Borrowers”

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