Millions of financially distressed U.S. homeowners sought relief from mortgage payments during the pandemic. While this program has brought much-needed relief to many who were financially distressed, it has not relieved the uncertainty and stress of financial instability. Bankruptcy is a legitimate legal tool that can be helpful for those who want (or need) to stop relying on foreclosure moratorium extensions. Bankruptcy can enable you to:

  • Prevent foreclosure on your home. 
  • Protect assets. 
  • Stop wage garnishment. 
  • Eliminate most debts. 
  • Rebuild your credit. 
  • Halt collections activities.
  • Establish a sensible financial plan.
  • Rebuild your credit.

How Does The Foreclosure Moratorium Impact Homeowners?

During the pandemic, moratoriums were imposed on foreclosures and mortgage payment forbearance programs were mandated under the CARES Act in order to protect delinquent homeowners from losing their homes. While the majority of homeowners have exited the program, new research from Harvard University indicates that 2 million homeowners are still behind on their mortgages.

Since the original 60-day foreclosure moratorium in March 2020, there have been several extensions for qualified homeowners. Some extensions lasted for several months, while others lasted for a matter of weeks. Many of the extensions were announced just days before the current moratorium was due to expire, resulting in added uncertainty and stress for delinquent homeowners. The CDC’s eviction moratorium expired on July 31, 2021, but the U.S. Department of Housing and Urban Development, US. Department of Treasury and U.S. Department of Veteran’s Affairs extended their foreclosure-related eviction moratoriums until September 2021.

Conflicting news reports and the seemingly never-ending cycle extensions often result in the following questions for financially distressed homeowners:

  • When will I need to resume making regular mortgage payments?
  • How will I repay the missed payments from my forbearance period?
  • Where do I turn for advice on establishing a plan for financial stability?

At some point, the moratorium extensions will end and any homeowners who are still in forbearance will need to repay their missed mortgage payments.

Who Qualifies For Mortgage Forbearance Under The CARES Act?

Homeowners with federally-owned or federally-backed mortgages such as those listed below may qualify for the foreclosure moratorium under CARES. To qualify for the program, the homeowner needs to complete a form claiming financial hardship due to the COVID-19 pandemic.

Homeowners who are unsure who owns their mortgage, can find this information by visiting the U.S. Consumer Financial Protection Bureau’s website.

How Can Bankruptcy Help Prevent Foreclosure In Maryland?

Bankruptcy is a legitimate legal tool that can provide stability and remove the stress and worry associated with the uncertainty of relying on the foreclosure moratorium as a means to avoid making mortgage payments. Bankruptcy can provide several advantages for Maryland homeowners who are in forbearance or who recently exited mortgage forbearance:

    • Enable you to afford your mortgage. Homeowners who qualify for a Chapter 7 bankruptcy may be able to discharge most debts, leaving more funds available each month to cover their mortgage payment.
    • Provide more time to catch up on missed mortgage payments. Homeowners who are having difficulty catching up on missed mortgage payments, can have their debts “reorganized” with a Chapter 13 bankruptcy. Under this scenario, the missed mortgage payments will be stretched out over 5 years, reducing the monthly amount and making it more affordable. As long as the homeowner abides by the terms of the repayment plan, the lender cannot take foreclosure or collections action.
    • Enable you to stay in your home longer. Homeowners who have decided to eventually leave their home may be able to stay a bit longer by strategically timing the filing of a Chapter 7 bankruptcy case. The filing can essentially act as an extension of the forbearance period.
    • Provide more time to catch up on owed property taxes. Homeowners who have fallen behind on property taxes can get extra time to catch up on these payments by filing for Chapter 13 bankruptcy. Chapter 13 gives homeowners 5 years to catch up on past-due property taxes. During this time, the mortgage lender and taxing authority can not foreclosure on the home.
    • Reduce your monthly mortgage payment and rebuild equity. Under certain circumstances, a homeowner can use Chapter 13 bankruptcy to strip a second mortgage (sometimes referred to as a “junior mortgage”) from their home’s title and be released from that mortgage. Without the second mortgage, monthly mortgage payments will be lower. As long as the homeowner continues to make regular payments on the primary mortgage, they will start rebuilding equity.


How Do I Know If Bankruptcy Is Right For Me?

Bankruptcy is a practical solution that can help rebuild a financially distressed homeowner’s future. Of course, every person’s economic situation is unique. That’s why it is important to work with an attorney who will take the time to fully understand your financial background, carefully evaluate all alternatives and provide you with the most advantageous options to consider. Our reputable and experienced Maryland bankruptcy attorneys can help you navigate this complex process. Contact Sirody & Ruben Bankruptcy Center at 410-415-0445 for more information on how bankruptcy may be used in conjunction with the pandemic foreclosure moratorium.


If you are concerned about the soon-to-expire foreclosure moratorium, contact Sirody & Ruben Bankruptcy Center. Our experienced attorneys will review your financial profile and make recommendations based on your individual goals.

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