Legal Question in Bankruptcy in New York

Bankruptcy and Forclosure

Hello I am writing to you under much stress.

The situation is about my mother who is elderly, disabled, and approaching 60 years old in a few months. She receives Social Security Aid because she has little money.

She has a home and an inexpensive car (which i pay for), both under her name.

Recently i learned she had refinanced one time, then another to cover the first loan. This week was notified of forclosure procedings, because she is 4 months in arrears.

THe problem is that she doesnt have a dime to her name. And she has managed to drain me and my sister financially, and we are at the end of our ropes at this time.We are trying to think of a solution, so that she doesnt loose the house and wind up homeless.

The idea of bankruptcy sounds like a solution. But we have no knowledge of bankruptcy and what it covers, or how to go about it.

Would the mortgage payments be included in a bankruptcy?

I appreciate your advice. And also any information you can provide will help tremendously. If you could recommend a lawyer that would help her inexpensively, that would be a blessing.

Many thanks.


Asked on 10/02/03, 11:25 pm

2 Answers from Attorneys
Eric Kochel The Law Office of Eric David Kochel, Esq., P.C.

Re: Bankruptcy and Forclosure

You absolutely CAN save the house by filing a Chapter 13 Bankruptcy! - and hearing what little information you have given it does seem like a possible solution. However, after the Chapter 13 is filed your mother, she (or you) will actually be faced with higher total monthly payments. The way it works in a nutshell is like this: You file the Chapter 13 Bankruptcy. The foreclosure proceeding is immediately stopped. Then you need to come up with a Chapter 13 "plan". This means that the total amount of arrears (i.e. the 4 months of mortgage payments that are past due or whatever you are behind)will be paid back over 3 to 5 years on a monthly basis to the creditor. In addition however, the regular monthly mortgage payments will have to be made each month. So in effect you must pay the regular monthly mortgage PLUS the Chapter 13 plan payments. If this is feasable within your mother's monthly budget, a Chapter 13 may work. Call me at (917) 257-3341 if you need an attorney or further questions answered.

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Answered on 10/09/03, 10:43 am
Debra Palazzo Law Offices of Debra Palazzo, LLC

Re: Bankruptcy and Forclosure

You can not "save" the house by declaring bankruptcy as your lender is a secured creditor and eventually will be able to foreclose if you can not make up the back payments. Bankruptcy will only buy you some time before foreclosure.

If there is enough equity in the home she may be eligible for a "reverse mortgage" which will pay off mortg and pay her small monthly check. She does not have to pay this back BUT upon her death or her vacating the home, the home must be sold and then the bank is re-paid w/ interest.

good Luck,

Debra Palazzo

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Answered on 10/07/03, 8:52 pm


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