If you’re facing the threat of losing your home due to foreclosure, you might feel overwhelmed and unsure of what to do. One option you can consider is filing for bankruptcy.
Bankruptcy can provide immediate relief and halt the foreclosure process, giving you the chance to get back on your feet financially.
Filing for bankruptcy triggers an automatic stay
When you file for bankruptcy, the court will issue an automatic stay, which is an order that prevents creditors from pursuing any collection efforts against you. This includes stopping any foreclosure proceedings on your home. The automatic stay remains in effect for as long as the bankruptcy process lasts, which can be several months, giving you time to reevaluate your financial situation and potentially save your home.
Chapter 13 bankruptcy: A repayment plan
Chapter 13 bankruptcy is for individuals who have a regular income and can afford to make monthly payments toward their debts. When you file for Chapter 13 bankruptcy, you propose a repayment plan to the court that outlines how you will pay back your debts over a period of three to five years. This repayment plan can include your past-due mortgage payments, which can help you catch up and prevent foreclosure. If you complete your repayment plan successfully, you can keep your home and discharge any remaining unsecured debts.
Filing for bankruptcy can help you stop the foreclosure process and provide temporary relief while you work on improving your financial situation. It’s crucial to weigh the pros and cons of each type of bankruptcy and make an informed decision about the best course of action for you and your family.