Bankruptcy May Stop Foreclosure
Chapter 13 Bankruptcy is Designed to Help You Keep Your Home
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A Chapter 13 bankruptcy allows an individual to catch up on past-due debts through a three-to-five year repayment plan. Many debtors take strategic advantage of Chapter 13 bankruptcy to stop foreclosure proceedings and catch up on mortgage payments.
Filing Chapter 13 bankruptcy can have several advantages, including structured repayments of secured debts, protection for cosigners, and openness of eligibility.
Compared to Chapter 7 bankruptcy, which requires a complex means test, Chapter 13 qualifications are simply having unsecured debts less than $360,475 and secured debts less than $1,081,400.
For more information on Chapter 13, or to take the next step in filing Chapter 13 bankruptcy, speak with a local bankruptcy attorney. Simply fill out our free evaluation form below or call 877-833-2410 to connect with an attorney near you today who can evaluate your case.
The Foreclosure Crisis in America
For millions of Americans, the dream of home ownership has turned bad. Over the past several years, the foreclosure rate has skyrocketed, while home values have plummeted.
Unemployment, unexpected medical bills, and divorce all lead to situations where mortgages payments are no longer affordable.
In cities like Detroit and Las Vegas, the foreclosure crisis has created entire neighborhoods of blight. All across the country, families wonder how they'll make their next payment, or whether they should just walk away.
How Chapter 13 Bankruptcy May Help Stop Foreclosure
By filing personal bankruptcy, the bankruptcy court issues an automatic stay, which is a court order that stops all actions by creditors during the bankruptcy proceedings.
Whether your home is facing a foreclosure auction, or if you've never missed a payment but are struggling to pay other bills, the automatic stay may give you breathing room to make sense of your finances.
In some cases, Chapter 13 bankruptcy can also be used to create a payment plan for 2nd or 3rd mortgages taken out against a primary home mortgage.
In a chapter 13 payment plan, the debtor makes a single payment to the bankruptcy trustee for all late payments, with the total debt being paid off over the three-to-five year payment period. Regular payments against the mortgage and other debts are also made during this time, so it important that the debtor has a regular income during this time.
Chapter 7 and Mortgage Foreclosure
If you do not have enough income to arrange a Chapter 13 repayment plan, or if you wish to completely walk away from your mortgage, Chapter 7 bankruptcy may be able to provide relief.
In a Chapter 7 bankruptcy, all non-exempt assets are sold, or liquidated, by the bankruptcy court to pay back creditors. In the case of home foreclosure, your home could be sold by the courts to repay the mortgage holder.
Most states have a homestead exemption, that would allow homeowners with little home equity to remain in their home as long they continue to make mortgage payments.
Learn About Your Options with a Local Bankruptcy Attorney
To get more information about mortgage foreclosure and how filing bankruptcy can help you keep your home and eliminate debt, connect with a local bankruptcy lawyer today.
Simply fill out our free form or call 877-833-2410 today and Clear Bankruptcy will connect you with an attorney in your area.