If you’re behind on your mortgage payments and under the threat of home foreclosure, you may be desperate for any solution that could work to save your home. Even worse, there could be various fraudsters trying to sell you a service that they claim will resolve your foreclosure problems. Always take a step back and consider any offer carefully to ensure that it’s not a fraud that will result in a more serious situation.
One potential solution to your foreclosure woes is perfectly valid and lawful if you can qualify for it: Chapter 13 bankruptcy. Keep reading to learn more about how Chapter 13 proceedings could save your home.
How do you file for Chapter 13 bankruptcy?
Those who qualify for Chapter 13 bankruptcy must first attend credit counseling. Then, they will formally file for Chapter 13 proceedings by paying a fee to the bankruptcy court and submitting the appropriate paperwork with information pertaining to their expenses, debts, income and creditor holdings related to both unsecured and secured debt. The court will then review this information.
Next, the court will carry out a creditors’ meeting with those to whom the filer owes money. The debtor will also submit a repayment plan to the bankruptcy court. After approving the repayment plan, the debtor will begin to make set monthly payments to the court, and the court will distribute these payments to the creditors. After three to five years, the repayment process will be complete and the remaining debts covered by the Chapter 13 plan will be dissolved.
How will Chapter 13 bankruptcy save my home?
As soon as you file for Chapter 13, your home will be protected by an “automatic stay.” The automatic stay prevents your creditors covered by the bankruptcy from pursuing strategies to collect on your debts. The automatic stay also covers foreclosure proceedings and any other lawsuit that seeks to recoup debt. It will even stop wage garnishing.
The bankruptcy repayment plan will then create a safe and affordable way for the borrower to get back on track with back payments owed to the mortgage lender. In this respect, it could help save a borrower’s home.
Do you want to know if you can qualify for Chapter 13 bankruptcy. Learn more about the requirements for Chapter 13, and if it’s a right match for your situation, don’t hesitate to move forward with the process. The longer you wait, the more in danger you’ll be of falling deeper into debt.