When faced with losing a family home, it is important to be familiar with options that can help. Personal bankruptcy is one option that may allow homeowners facing foreclosure to avoid losing their homes and enjoy debt relief. Many people make a diligent effort to pay their bills, yet still fall behind and find themselves facing the stress of past-due bills and overwhelming debt. There are different options that may help with foreclosure, and personal bankruptcy is one to consider.
Chapter 13 bankruptcy may help a struggling homeowner, with a reliable source of income, reorganize his or her debt and avoid foreclosure, however, it is important to act as soon as possible. Filing for bankruptcy causes an automatic stay to go into effect which will halt creditor collection actions against the filing party. At that point, the filing party may be able to bring past due home loan payments current over time. Overall, Chapter 13 bankruptcy provides the filing party with the opportunity to reorganize his or her debt into a manageable repayment plan and possibly avoid foreclosure.
Once the filing party has filed for bankruptcy, and the temporary stay goes into effect, the filing party will work with the court to develop a repayment plan. When the plan is approved, and abided by, usually over a period of 3 to 5 years, all debts that were not addressed by the plan are discharged and the filing party can, hopefully, enjoy no longer living with the stress of accumulating debt and prior missed mortgage payments threatening foreclosure.
It is crucial that individuals struggling with debt and facing foreclosure are familiar with bankruptcy options that may help them. Bankruptcy may be complicated, so it is important to consider having a trained and knowledgeable professional to guide and develop the best plan of action for the individual and the circumstances he or she is facing.
