Facing foreclosure can be alarming and even terrifying, which is why those facing the uncertainty of losing their home should be familiar with the legal protections available to them. Chapter 13 bankruptcy may be one option that may be able to help protect a family home.
When a struggling consumer is facing overwhelming debt and all the stress that goes along with that, the last thing they want to also have to face is the prospect of losing their home. Different legal options may be able to help them guard against this. Chapter 13 bankruptcy is a personal bankruptcy option that allows the struggling consumer to reorganize their debt and repay it over a period of time and may be able to help with foreclosure.
As is true of all bankruptcy options, once the bankruptcy filing has been made, there is an automatic stay that goes into effect which halts all creditor collection actions while the bankruptcy process proceeds. This means that the filing party is safe from creditors during the bankruptcy process. A Chapter 13 bankruptcy can help the filing party have the time they need to figure out if they can catch back up on their mortgage payments as part of the Chapter 13 bankruptcy process.
Chapter 13 bankruptcy is a bankruptcy option for filing parties that have a reliable source of income that will allow them to repay their debts over time according to the repayment plan worked out with the bankruptcy court. Additional bankruptcy options may also be available for different circumstances. Because the process can be complex, and it is important for the filing party to understand which option is best for them, trained guidance can also be useful during the process to help a struggling homeowner save their home.