How Chapter 13 Bankruptcy Works to Stop Foreclosure
Everyday, foreclosure takes people away from their homes. You may feel helpless against creditors trying to take your home, but Chapter 13 bankruptcy may provide immediate relief and long-term help.
In this section, we give you an overview of how filing Chapter 13 bankruptcy can put an immediate halt to your foreclosure, and provide the tools you need to get your mortgage back on track.
Learn how Chapter 13 works during a free case evaluation with a local bankruptcy lawyer. Complete the free form on this page to connect right away.
With the struggling economy, nationwide job layoffs and disintegrated retirement and pension plans, the future may appear frightening for some homeowners.
Wondering if bankruptcy could help you? Ask yourself these questions:
- Are you having trouble making your mortgage payments?
- Did you recently lose steady income or come into unexpected debt and are unsure how you're going to pay the bills?
- Is your lender threatening foreclosure action?
- Are you frustrated because you've tried to work out a payment plan but the lender won't budge?
- Have foreclosure proceedings already started on your house?
- Are you looking for extra time to bring your mortgage payments current?
People who answer "yes" to any of these questions often consider filing Chapter 13 bankruptcy as a way to possibly save their homes from foreclosure and get back on track with their payments.
Chapter 13 bankruptcy was designed to save homes from foreclosure.
Under Chapter 13, a filer is placed on a realistic repayment plan to straighten out their debts. During this repayment period, the filer can keep his or her hard-earned assets.
How Does Chapter 13 Bankruptcy Work?
Debtors who file this type of bankruptcy are typically allowed to keep all of their property.
In Chapter 13 bankruptcy, the bankruptcy court works with the debtor and his or her bankruptcy lawyer to establish a realistic, interest-free repayment plan.
The plan details when the payments will occur and the duration of repayment. Typically, a debtor is given between three and five years to repay his or her debts.
Both the debtor and the creditors must strictly adhere to the repayment plan.
Generally, as long as the debtor make payments on time, he or she can keep their secured property (like a home or car).
In addition, under Chapter 13 bankruptcy, creditors are prohibited from contacting the debtor with collection calls and letters. Many filers find this to be a big relief.
Millions of Americans Are Facing Foreclosure
Recent reports have shown massive increases in foreclosures.
In fact, nationwide, one in every 464 households is facing foreclosure, according to a recent article. There's little doubt that the nation is facing a foreclosure crisis.
But there is hope.
Every years, thousands of homes are saved from foreclosure action because of Chapter 13 bankruptcy protection.
There are many reasons why people find themselves facing foreclosure, which include:
- recent job loss or loss of income
- sudden, unexpected bills
- injuries or illnesses
- increases in property taxes
- predatory lending practices with unfair and unexpected rate hikes
Foreclosure affects people of all different income levels-no one is automatically immune from financial crisis. Even some of the richest celebrities have filed bankruptcy to save their homes.
If you're considering taking action and filing Chapter 13 bankruptcy, you'll want a bankruptcy lawyer on your side to make the most out of your personal bankruptcy.
The Bankruptcy Lawyer's Role
If you're thinking about possibly filing personal bankruptcy, a bankruptcy attorney can be a great resource to answer questions and evaluate your individual case.
Total Bankruptcy has an extensive network of sponsoring bankruptcy lawyers who are happy to talk to you with no obligation.
We have sponsoring attorneys from all around the country, so we're likely to have a bankruptcy lawyer in your area.
Connect to a local bankruptcy lawyer by calling 877-349-1309 or by filling out the free bankruptcy case evaluation form on this page.
The above summary of bankruptcy law is by no means all-inclusive and is not intended to serve as legal advice. Laws may have changed since our last update. For the latest information on bankruptcy laws, speak to a local bankruptcy lawyer in your state.