How Chapter 13 Bankruptcy can Save Your Home

For most people, their home is the center for many of life’s activities. Your home is where life happens; raising your children, celebrating milestones, holidays, graduations, etc., it is the safe haven away from the stresses of life. When this is put in jeopardy due to overwhelming debt, the loss of a job, reduction of income, or an unexpected medical event you need to explore every resource possible to protect your most valuable investment.

Before accepting losing your home, you may wish to consider your options for stopping foreclosure. Chapter 13 bankruptcy could act as the relief method you need if you qualify and feel that moving forward with this route suits your circumstances.

Repayment plan

With Chapter 13 bankruptcy, court-approved repayment plans allow you to have additional time to pay off your outstanding debts. When it comes to stopping foreclosure, you can utilize this method to address the payments you previously missed. However, you must also keep up with the current mortgage payments as well.

Therefore, you will need to ensure that your current income will cover these payments. This aspect will likely also need to go into consideration when you propose the length of time your repayment plan will cover. A longer repayment period may mean lower payments in addition to your current full mortgage payment.

Additional mortgages

Individuals who face financial struggles often take out second or third mortgages on their homes in hopes of lessening the financial burden. However, you could face issues if you still fall behind on payments and fear foreclosure. Luckily, Chapter 13 bankruptcy can also address these additional mortgage payments.

Often, the bankruptcy process reorganizes these payments as unsecured debt. By completing your case successfully, the court will likely completely discharge those unsecured debts as they become a lower priority. Of course, additional details of your case could play a role in whether this total forgiveness occurs.

More information

Because many bankruptcy myths exist, you may balk at the idea of moving forward with such an option. However, Chapter 13 bankruptcy can offer many benefits to qualifying parties. Therefore, you may wish to gain reliable information on this debt relief method.

Luckily, the experienced Board Certified attorneys at the Bond & Botes Law Offices can provide you with professional insight into this route and how well it may suit your needs. Therefore, you may wish to consider enlisting such assistance in hopes of avoiding foreclosure.