Stopping Foreclosure in New Hampshire Using Chapter 13 Bankruptcy
Filing for Chapter 13 bankruptcy in New Hampshire immediately triggers a federal automatic stay, which legally forces your mortgage lender to halt any scheduled foreclosure auction. You can then propose a 3-to-5-year repayment plan to catch up on your missed payments and keep your home.
How Chapter 13 Bankruptcy Stops Foreclosures in NH
When you are falling behind on your mortgage and the 45-day notice of sale has arrived in your mailbox, it can feel like you are out of options. However, federal bankruptcy laws provide a powerful tool to save your home. Unlike Chapter 7 bankruptcy-which is designed to liquidate assets to wipe out debt-Chapter 13 is a reorganization bankruptcy. It allows homeowners in New Hampshire to restructure their debts and force the bank to accept a realistic repayment plan over several years.
Because the interaction between state property laws and federal bankruptcy codes is highly complex, it is highly recommended to hire an experienced bankruptcy lawyer from our directory. They will handle the filings at the U.S. Bankruptcy Court for the District of New Hampshire, Concord and help ensure your family's home is protected.
Step-by-Step Guide to Chapter 13 Protection
Utilizing Chapter 13 bankruptcy to stop a New Hampshire foreclosure involves several distinct legal mechanisms. Here is exactly how the process shields your property.
The Power of the Automatic Stay
The very instant your lawyer files Form B 101, FED, U.S. Bankruptcy Court, Voluntary Petition for Individuals Filing for Bankruptcy, a federal injunction known as the 'automatic stay' goes into effect. Governed by 11 U.S.C. § 362, this stay makes it completely illegal for your mortgage servicer to proceed with a foreclosure auction, send collection letters, or call you. Generally, filing a bankruptcy petition triggers an automatic stay that can pause a scheduled auction, although repeat-filer limitations apply under federal law.
Catching Up on Arrears Through a 3-5 Year Repayment Plan
The primary benefit of Chapter 13 is the repayment plan, governed by 11 U.S.C. § 1322. Instead of having to come up with a massive lump sum to cure your defaulted mortgage, you will file Form B 113, FED, U.S. Bankruptcy Court, Chapter 13 Plan. This document proposes a plan to pay back your 'arrears' (the missed payments, late fees, and penalties) over a period of 36 to 60 months. As long as you make your regular monthly mortgage payment moving forward, plus the approved Chapter 13 plan payment, the bank cannot foreclose on you. Precedents like In re Beeman, 235 B.R. 519 (NH Bankruptcy Court 1999) demonstrate how courts oversee these structured plans to ensure fairness for both the debtor and the lender.
Lien Stripping for Second Mortgages
If the real estate market drops and your home is worth less than the balance of your primary (first) mortgage, your second mortgage or HELOC is considered 'wholly unsecured.' In a Chapter 13 bankruptcy, you can utilize a process called 'lien stripping' under 11 U.S.C. § 506. The bankruptcy judge can strip the second mortgage lien off your property title and reclassify that debt as unsecured-meaning it gets paid pennies on the dollar alongside credit card bills, and is completely wiped out at the end of your 5-year plan.
The Strict Filing Timeline Before the Auction Hammer Falls
Timing is everything. In New Hampshire, you must file your Chapter 13 bankruptcy petition before the foreclosure auction is completed. If the auctioneer's hammer falls and the property is legally sold to a third-party bidder, your right to cure the default in bankruptcy is extinguished. You cannot file for bankruptcy the day after the sale and expect to get your house back. You must act decisively while you still hold the legal title to the property.
Costs of Chapter 13 Bankruptcy in NH
Filing for bankruptcy requires federal filing fees and attorney compensation, though most of the attorney fees can actually be rolled into your 3-to-5-year repayment plan:
| Filing / Legal Expense | Estimated Cost (USD) |
|---|---|
| Federal Bankruptcy Court Filing Fee | $313 flat fee |
| Required Credit Counseling Courses | $20 - $50 total |
| Chapter 13 Attorney Fees (Flat Rate) | $3,500 - $4,500 (Mostly paid via the plan) |
Frequently Asked Questions (FAQ)
Will Chapter 13 wipe out my main mortgage?
No. A primary mortgage is a secured debt tied to your property. Chapter 13 allows you to catch up on missed payments over time, but you still must pay the principal balance to eventually own the home outright.
Do I have to go to court in Concord?
Usually, no. Most Chapter 13 cases require you to attend a 341 Meeting of Creditors, which is often held via telephone or video conference. Actual courtroom appearances before a judge are rare unless your plan is heavily contested by the bank.
Can I include my property tax debts in the Chapter 13 plan?
Yes. If your local New Hampshire town has placed a tax lien on your property, you can include those municipal tax arrears in your 5-year repayment plan to prevent a tax deeding while you catch up.
What happens if I miss a Chapter 13 plan payment?
If you fail to make your required payments to the bankruptcy trustee, the court can dismiss your case. If the case is dismissed, the automatic stay drops, and the bank can immediately resume the foreclosure process.
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