Filing for Chapter 13 bankruptcy case can be an excellent way to receive long-term support in facing foreclosure with your home. Chapter 13 bankruptcy can often be a complicated process and it can have some serious consequences for your credit profile. Avoiding foreclosure however makes the hassle well worth it as chapter 13 bankruptcy could be one of the best ways to save your home.
A bankruptcy is often seen as a last resort but a chapter 13 bankruptcy can be seen as a lifeline if you’re in danger of facing foreclosure. Chapter 13 bankruptcy is designed to help you keep your property as long as you stick to repayment plan with your creditors. Bankruptcy is not a quick fix and you often have to adhere to a series of legal requirements and eligibility standards. Bankruptcy will also stay on your credit file for at least 10 years and this could affect your future access to financial products.
Under Chapter 13 bankruptcy you can establish a repayment plan that will take between 3 to 5 years based off of your income level. By following the plan a portion of your wages will likely be garnered to help you discharge some of your debts. If you are able to follow the repayment plan is very likely that you will come through the bankruptcy path keeping your home ownership.
Using chapter 13 bankruptcy will also give you access to the automatic stay provision. This gives you a break from the ongoing communication and collection from creditors. This ensures that your mortgage lender and other creditors will not be contacting you over the repayment process. If a mortgage lender has completed the process of a foreclosure sale before bankruptcy is filed, it is possible that your home could still go into a foreclosure auction. Entering into chapter 13 bankruptcy negotiations before you face foreclosure is always the wisest course of action.
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