A chapter 7 bankruptcy will not permit you to keep your primary residence if you are behind in your payments, but a chapter 13 bankruptcy will help you by "stripping" away from your second mortgage and rolling the arrears on your first mortgage into the payments under the approved chapter 13 plan. This will reduce your monthly payments and the related stress of carrying two mortgages. In a chapter 13 bankruptcy, a debtor files a repayment plan with the Bankruptcy Court proposing to repay all or a portion of his or her debts - both secured and unsecured - over time. The amount you will have to repay depends on how much you earn, the amount and types
of your debt, and how much property you own. The length of your plan will be for a term of either 3 or 5 years depending upon whether your disposable monthly income is greater than or less than the median income for a family of your size in the geographical region where you live.
The legal fee for filing a chapter 13 petition is higher than that for a chapter 7 petition because we must remain involved in your case for the duration of the plan, which we must design and have approved by the Court. However, the entire legal fee does not have to be paid in advance and a portion can be included in the chapter 13 plan approved by the Bankruptcy Court.