If you’re facing foreclosure, a Chapter 13 bankruptcy could help you minimize the risk of losing your home, but you do need to act quickly.
How can a Chapter 13 bankruptcy help you stop foreclosure?
When you go into a Chapter 13 bankruptcy, the first thing that happens is that an automatic stay is put into place. This means that creditors and collectors can no longer attempt to collect debts or move forward with actions like foreclosures or repossessions. If they violate the stay, you could hold them legally responsible for doing so and violating the law.
A Chapter 13 Plan can normally force your mortgage company to give you up to 5 years to catch up on delinquent payments.
Doing this could help you keep your home.
Is bankruptcy the only option available to prevent foreclosure?
No, bankruptcy may not be your only option. There are alternatives such as talking to your lender to seek a forbearance or special repayment plan.
The thought of losing your home in foreclosure can be scary and frustrating, but there are options available to help you keep your property. Chapter 13 liquidation bankruptcy is one of those options, but there are many for you to consider based on your circumstances. It’s worth looking into state and federal laws, talking to your lender and looking at all the options before you decide what you want to do to protect your home against an impending foreclosure. If all else fails Chapter 13 is a viable alternative because you can normally force the mortgage company to accept your payment plan.