Teresa Guidice is due to be released from prison in December 2015, but it may not be the happy homecoming she has been anticipating over the past year. Although her attorney expressed his belief in the past that the Guidices were in no danger of losing their infamous house to foreclosure, that prediction fell on deaf ears of the judge who recently gave the green light for an upcoming foreclosure sale of the home. Judge Stephan Hansbury accused the Guidice’s of attempts to delay the inevitable and granted summary judgment for the bank holding the mortgage on the Guidice’s home. It appears it is difficult to maintain a $10,679.00 monthly mortgage payment while serving time in federal prison.
Filing Chapter 13 to Prevent Foreclosure
While the Guidice’s could still cure their default by bringing the mortgage payments current prior to a Sheriff’s sale, having been convicted of bankruptcy fraud, it is unlikely they would use one of the best tools for dealing with foreclosure, Chapter 13 of the Bankruptcy Code. The filing of Chapter 13 would stop a Sheriff’s sale or a foreclosure sale from the courthouse steps by placing the amount need to “cure” or catch up the delinquent mortgage payment into a repayment plan. This Chapter 13 repayment plan would allow a homeowner to pay back the mortgage arrears over a three or five-year repayment period, with the goal to exit the Chapter 13 plan completely current on the home mortgage. A Chapter 13 bankruptcy must be filed before the foreclosure sale has taken place. While Chapter 13 is an excellent tool for allowing mortgage arrears to be caught up over time, it will generally not allow the regular terms of the mortgage note to be altered. So even if the Guidice’s sought Chapter 13 relief to prevent a foreclosure, they would still have to find a way to make the $10,679.00 monthly mortgage payment going forward.
I have used this topic in prior blogs to emphasize how critically important it is to be truthful and to fully disclose all required information in bankruptcy schedules. But this side of the story illustrates how helpful a Chapter 13 bankruptcy proceeding could be to saving the Guidice’s home yet how unlikely, in view of their past criminal conduct, they will be to avail themselves of this relief. If you are having difficulty in keeping your home mortgage payments current yet want to keep your home, please contact one of our locations nearest you in Alabama, Mississippi or Tennessee for a free, confidential consultation with one of our experienced, licensed attorneys.
Carla M. Handy is the Managing Partner of the Bond & Botes Law Offices in Gadsden and Anniston, Alabama. She holds a Bachelor of Arts from Auburn University, and a Juris Doctorate from the University of Alabama School of Law. She has been helping families navigate consumer bankruptcy cases since 1994.Read her full bio here.