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What To Do When You are being Foreclosed – Chapter 13

by Eugene S. Melchionne, Connecticut Bankruptcy Lawyer · Posted in *Bankruptcy Information, *Chapter 13 Bankruptcy

Since Connecticut has two kinds of foreclosure – auction sale or strict, it is important to know where your case is in the process. Thankfully, even if the Judgment of Foreclosure has entered in your case or the auction sale has taken place, it still may not be too late. In Connecticut, as long as the sale has not been confirmed by the Court or the Law Days set in the foreclosure case have not passed, you are still eligible to file Chapter 13 in the U.S. Bankruptcy Court.

If you are like any of my clients, you have tried it all before seeking the advice of a bankruptcy attorney. Yes, you fell behind on your mortgage, but you didn’t stick your head in the sand.

You attempted to refinance. You applied to every lender you could find and in the process, totally tanked your credit score. You attempted to call those nasty guys at the mortgage company. You tried to work with them, get them a payment or two or even possibly tried to fulfill that workout agreement they drafted. Maybe you tried to get the assistance of the state court; if you are in Connecticut, you might have filed the Motion to Restructure the mortgage arrears. Nothing has seemed to work.

Or maybe you are just getting around to spitting the sand out of your mouth and opening your eyes. Now what?

What does Chapter 13 do for you? It stops everything. It allows you to pay the arrearages back over a period of time. Keep in mind that the amount to repay is substantially increased. In addition to the back payments, you will have to pay all the Superior Court costs and attorneys fees as determined by the Judge as well as the auction expenses. In addition to all of that, you will have your own attorney fees, the Bankruptcy Court filing fee and costs, and the Chapter 13 Trustee’s fees to pay into the plan. In Connecticut, the Trustee’s fees alone are 10% of every payment you make for entire duration of the plan. Yes, you can spread your payments out over five years, but that is a very long time. Keep in mind that while you are in Chapter 13, the mortgage payments may be increasing further due to a variable interest rate or increased costs like taxes and insurance.

The key to the process is to seek out the assistance of a qualified bankruptcy attorney to advise you as early in the process as possible. Take your head out the sand now!

About Eugene S. Melchionne, Connecticut Bankruptcy Lawyer

Mr. Melchionne is a graduate of The University of Connecticut (BA 1977) and Drake University School of Law (JD 1980) where he received the American Jurisprudence Award for academic excellence. Most recently, Mr. Melchionne was appointed to the Commission on Mortgage Foreclosures by Connecticut Supreme Court Chief Justice Chase Rogers to recommend changes to procedures to protect consumers in the Connecticut Courts in foreclosure cases. Since 1980, Mr. Melchionne has focused his practice in the areas of consumer bankruptcy, workouts and foreclosure defense in distressed real estate markets, real estate transactions, condominium law, commercial litigation, business organizations and probate. Prior to opening his office in 1990, Mr. Melchionne was the Vice President of the Waterbury Credit Bureau and was associated with Grady & Riley in Waterbury, Connecticut and DiPietro, Kantrovitz & Brownstein, P.C. in New Haven, Connecticut. From 1990-1998, Mr. Melchionne was of counsel to Bender & Anderson handling that firm's complex litigation and trials. In addition to his practice, Mr. Melchionne was an adjunct professor at the American Institute of Banking and Teikyo Post University teaching bankruptcy, real estate, commercial and consumer law. Mr. Melchionne also advised the Corporation Counsel's office for the City of Waterbury on bankruptcy and foreclosure matters and mentored junior attorneys in that office. Mr. Melchionne was appointed State Chair for the National Association of Consumer Bankruptcy Attorneys (NACBA). He acts as liaison between the national organization and Connecticut attorneys who are members of the Association.

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