Can Bankruptcy Stop Foreclosure?

For individuals that are deep into debt, foreclosure is a very real danger. Because homeowners are not able to pay back their loans, the lenders can take away their house as collateral. Bankruptcy might seem like the only way to avoid a foreclosure, but does chapter 13 stop foreclosure?

The simple answer is: yes, it can. Chapter 13 bankruptcy offers a way for people in debt to settle their debts, and maintain their homes. Keep reading this short article and I’ll show you how you can prevent foreclosure and save your home.

Chapter 13 is referred to as a “wage earner’s plan.” This is because it allows individuals to pay off what they owe. This is completed through a repayment plan. Debts might be reduced so that they can return on their feet. Once they do, they are still expected to pay off their debts. If you’re dealing with foreclosure, chapter 13 halts foreclosure. Unlike the other chapters, 13 specifically gives protection to people in debt.

To become qualified for Chapter 13, the 1st step is to submit a petition. Generally, once you’ve submitted a petition, you get an automatic stay. This is protection from foreclosure, and allows you to keep your residence while your petition is being evaluated. When this is in place, it permits the person filing for bankruptcy to have some room to work with.

In just two weeks of filing for Chapter 13 bankruptcy, a plan has to be made. This strategy will indicate how the individual will be able to repay debts, and what needs to be completed to make this achievable. If the person’s income is lower that what the debts are, the debts may be reduced. The general goal of chapter 13 is to halt foreclosure, and allow the person to pay back debts. If you’re in debt and feel concerned about losing your home, chapter 13 is a great method to gain some momentary relief from the circumstance.

Filing for Chapter 13 bankruptcy can be a nerve-racking and overwhelming procedure however. I strongly advise that you make use of bankruptcy companies, because they complete all the paperwork on your behalf. The majority of bankruptcy services give free evaluations, so you’ll be able to learn if bankruptcy is right for you personally.

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