For people that are deep in debt, foreclosure is a terribly real threat. Because homeowners are not able to pay back their loans, the banks can take away their house as collateral. Bankruptcy might appear like the best way to halt a foreclosure, but does chapter 13 stop foreclosure?
The short answer is: yes, it can. Chapter 13 bankruptcy offers a means for people in debt to settle their debts, and maintain their homes. Keep reading this brief article and I’ll demonstrate how you can avoid foreclosure and save your home.
Chapter 13 is generally known as a “wage earner’s plan.” This is because it permits individuals to pay off what they owe. This is executed via a repayment plan. Debts could be reduced so they can get back on their feet. Once they do, they will be still obligated to pay back their debts. If you are facing foreclosure, chapter 13 halts foreclosure. Unlike the other chapters, 13 specifically offers protection to individuals in debt.
To be eligible for Chapter 13, the initial step is to submit a petition. In most cases, after you’ve filed a petition, you get an automatic stay. This is protection against foreclosure, and allows you to retain your house while your petition is being evaluated. When this is in effect, it permits the person filing for bankruptcy to have some room to work with.
In 2 weeks of filing for Chapter 13 bankruptcy, a strategy must be made. This strategy will indicate how the person will be able to repay debts, and what has to be completed to make this achievable. If the individual’s income is lower that what the debts are, the debts might be reduced. The general purpose of chapter 13 is to stop foreclosure, and enable the person to pay off debts. If you are in debt and feel concerned about losing your home, chapter 13 is a great way to gain some momentary relief from the predicament.
Filing for Chapter 13 bankruptcy can be a nerve-racking and overwhelming process however. I highly suggest that you take advantage of bankruptcy services, since they complete all the paperwork on your behalf. A lot of bankruptcy services offer free consultations, so you may learn if bankruptcy is right for you.
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