Protecting a family home from foreclosure is a serious and stressful concern for many families and homeowners, including in Tennessee. There are ways that the bankruptcy process may help. One option may be the Chapter 13 bankruptcy process that, in addition to helping struggling individuals reorganize their debt, can also potentially provide options to help avoid foreclosure.
For individuals with overwhelming debt burdens, the daily stress can be significant. The Chapter 13 bankruptcy process may be available to individuals who have a reliable source of income to enjoy relief from foreclosure and relief from debt. The Chapter 13 bankruptcy process allows a filing individual to reorganize their debt into more manageable payments so that they can repay their debts according to a repayment plan developed with the help of the bankruptcy court and approved by the bankruptcy court.
In addition, Chapter 13 bankruptcy may be an option to consider to help stop foreclosure. Once a Chapter 13 bankruptcy petition has been filed, an automatic stay goes into effect that prevents all creditor collection actions from proceeding. This includes foreclosure actions. The foreclosure process is stopped once the filing party files for bankruptcy. The past-due mortgage payments may then be brought current over a reasonable period of time.
One of the greatest concerns individuals facing financial struggles may have is saving their family home from foreclosure. Because the bankruptcy process provides different options to help individuals in different circumstances, it is useful to understand how the available options work and may help them during a tough time.
Source: Bankruptcy.findlaw.com, “How Chapter 13 Works,” Accessed July 19, 2016