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When is it too late to file a chapter 13 bankruptcy?

The point of no return for bankruptcy depends on why you are filing. Is just to pay back your debt over time or are you filing to save your home from foreclosure? It can make a difference.

Just Paying Off Debt

If you are just trying to pay your debts over time for an affordable amount, then there is no real deadline other than to avoid an impending wage execution, bank levy or entry of judgment in a law suit.

The issue with judgments is that they can create a lien against any real estate you own (which for most people is just their home) and increase the cost of your bankruptcy because additional steps need to be taken to remove said lien after you file.

Trying to Save the Home

But if you are trying to save your home, there is not an unlimited amount of time. It must be done prior to the sheriff sale. That is the point of no return or "drop dead date."

Once that happens, the only way to keep the home is to pay off the mortgage balance within the 10-day redemption period under New Jersey law, following the sale. Naturally, unless you are trying to conclude a refinancing, that solution is not a very practical one.

The good news is that banks do not go directly to sheriff sale after the foreclosure suit is commenced.  This offers you some time to save the home through a bankruptcy. However, I would recommend that you file as soon as possible, since every month you wait makes the arrearage that much bigger.

So What Do I Do?

If you live here in southern New Jersey, are behind on your mortgage, and want to try and save your home, please feel free to call my office at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case.

If you are looking for more information about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.

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Steven J. Richardson
Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.