Bankruptcy help with foreclosures for struggling homeowners

On Behalf of | Nov 1, 2019 | Chapter 13 Bankruptcy |

Struggling consumers may be able to enjoy relief from foreclosure through personal bankruptcy protection options they should be familiar with. Chapter 13 bankruptcy may help a struggling homeowner get current on their mortgage payment and reorganize their debt so they can repay it over a more manageable period of time.

Chapter 13 bankruptcy is a reorganization bankruptcy option that works out a repayment plan with the struggling consumer or homeowner so that they can repay their debts over a 3 to 5 year-period that is more manageable for them. The length of time for the repayment plan is typically determined by the filing party’s income and Chapter 13 bankruptcy is also best for struggling consumers and homeowners who have a reliable source of income they can repay their debts with. The bankruptcy court will help them work out a repayment plan that can also help a struggling homeowner fighting foreclosure.

In some circumstances, Chapter 13 bankruptcy can also help with foreclosure concerns and to stop foreclosure. The process provides an automatic stay of creditor collection actions which prevents creditors from pursuing any collection actions against the filing party during the bankruptcy process. It may also allow the filing party to include their mortgage arrears in the process so they can then get caught up on past-due payments through their repayment plan. Because it may not help in all circumstances, it is important for struggling consumers to act promptly to seek help with their foreclosure concerns.

Foreclosure can, of course, weight heavily on any struggling homeowner which is why they should be familiar with legal resources that may help them keep their home and enjoy debt relief. Personal bankruptcy protections, including Chapter 13 bankruptcy, are there to protect struggling consumers who should be aware of their potential benefits that may also help with foreclosure concerns.