For anyone struggling with debt and to make mortgage payments, and worried about foreclosure and holding on to their family home, personal bankruptcy options are important to understand and consider. Personal bankruptcy options may be able to help consumers and homeowners struggling with overwhelming debt and fears of being unable to stay in their homes.
Chapter 13 bankruptcy basics
Chapter 13 bankruptcy is a reorganization bankruptcy option that may also be able to help with foreclosure and the potential loss of a home. Chapter 13 bankruptcy allows the filing party to reorganize their debts into a manageable repayment plan to be repaid over time which is usually three to five years. This option is most helpful for filing parties with a reliable source of income. The filing party will be guided through the process of developing a repayment plan with the help of the bankruptcy court.
How chapter 13 bankruptcy may be able to help homeowners
Chapter 13 bankruptcy may also be able to provide relief for struggling homeowners concerned about losing their home. Once the filing party files for bankruptcy protection, an automatic stay goes into effect which prevents the foreclosure process from proceeding during the bankruptcy process while the filing party is working out their repayment plan. The automatic stay prevents all creditor collection actions during the bankruptcy process. Once the repayment plan has been worked out, the filing party may be able to repay missed mortgage payments over the course of their repayment plan and save their home from foreclosure.
Other personal bankruptcy options may also be able to help struggling homeowners which is why it is helpful to be familiar with the different types of bankruptcy protection. Bankruptcy is one option that struggling consumers and homeowners should be familiar with to help with the financial challenges they face.