Bankruptcy Stops Foreclosure

Chapter 13 bankruptcy can save your house from foreclosure.  Unlike a chapter 7, a chapter 13 bankruptcy can save your house from foreclosure.  In these tough times, many people have temporarily fallen behind on their mortgage payments.  It can be hard to get back on your feet, if you are behind on your mortgage.  The bank may have already started the foreclosure process or may be pressuring you to get caught up immediately.  At the same time, you may be dealing with other creditors that want to get paid first.  Chapter 13 is the solution.  You can save your house and get rid of all your other debts too.

You probably have other debts, besides your mortgage.  If you have credit card debt, medical bills, or other unsecured debt, those payments will make it difficult to get caught up on your mortgage.  Basically, the credit card company doesn’t care if you lose your house, they want to get paid back first.  Chapter 13 puts a stop to that.  When you do a chapter 13 bankruptcy, the unsecured debts get paid last; and then, they only get what’s left over after everyone else is paid.  This means that you can take care of your house, without worrying about those general unsecured creditors.

If you don’t file a chapter 13 bankruptcy, the bank could demand that you get caught up in as little as 90 days.  When you file a chapter 13 bankruptcy the automatic stay stops the foreclosure, while you get your payment plan confirmed by the court.  The chapter 13 plan will provide for the curing of your default over 36 to 60 months.  The bank has to accept the payment schedule in the plan.  This gives you plenty of time to get current.

A chapter 13 bankruptcy allows you to save your house and get rid of all of your other debts.

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