Home » Law and Legal Articles » Chapter 13 Bankruptcy May Save Your Home From Foreclosure
Chapter 13 Bankruptcy May Save Your Home From Foreclosure
Chapter 13 bankruptcy can prevent or stop foreclosure proceedings. This type of bankruptcy is a viable option for people with regular income to set up a repayment plan with creditors.
October 13, 2011 /Law and Legal PR News/ -- Chapter 13 Bankruptcy May Save Your Home From Foreclosure
Today most people know someone facing the threat of losing a home through foreclosure by the mortgage lender. With today's high unemployment rate, falling behind on a mortgage is not that uncommon. Most people don't have enough money in savings to continue to make house payments for very long after job loss.
When mortgage payments fall into serious arrears, the bank might institute the legal action of foreclosure, which either allows the lender to sell the house and apply the proceeds against what is due on the mortgage.
One way a distressed homeowner can usually stop his or her home from being foreclosed upon is to file a petition under Chapter 13 of the U.S. Bankruptcy Code. The filing of the bankruptcy petition immediately stays (stops) all collection action or legal proceedings against the debtor, including foreclosures.
Chapter 13 is available to people with regular income. The debtor is allowed to set up a court-approved payment plan that lasts three to five years. The debtor pays their mortgage arrears, car payments, taxes, student loans, unsecured debt like credit cards, in fact all debt, for as little as 10 cents on the dollar depending on their income.
A mortgage is usually handled in this way during the duration of the plan: the debtor must continue to stay current on payments as they come due, and the past-due mortgage payments are consolidated and stretched out over the years of the plan to bring the loan current.
If you are in financial crisis that threatens your family home, do yourself and your loved ones a favor and talk to an experienced bankruptcy attorney as soon as possible to determine whether a Chapter 13 bankruptcy filing might be the solution to the problem. Don't wait until the house is on the auction block. Take early action in the interest of family stability.
Article provided by Law Solutions
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