As this blog has mentioned previously, when family in southeastern Tennessee files for bankruptcy protection, they get the benefit of having immediate relief from all debt collection efforts, which includes foreclosures.
However, at least in a Chapter 7 bankruptcy, the protection from foreclosure only lasts so long. This is because, if a family falls behind in payments, no bankruptcy will stop the mortgage holder from taking back the home eventually, even though following a bankruptcy the mortgage holder can no longer turn around and sue the family personally. Usually, if a family is significantly behind on their mortgage payments, all a Chapter 7 does is drag out the process.
Such is not the case, however, when it comes to Chapter 13 bankruptcies. As part of their Chapter 13 repayment plan, debtors can set aside a portion of their monthly repayment to go to covering the amount of back payment they owe. As long as the family makes the monthly payments that they should, then they will cure the default on their mortgage and be able to keep their home permanently.
As with anything, this approach might not be right for every Bradley County family who is behind on their house payments. Making up back payments during a Chapter 13 may mean a person has to sink more into their monthly debt repayment plan, leaving less available to the family to meet their basic living expenses.
Moreover, Chapter 13 repayment plans generally are important legal documents that may be hard for someone without experience in bankruptcy to understand, especially when it comes to figuring out how to cure a mortgage in default through the Chapter 13 process. This is why the assistance of a bankruptcy specialist may be invaluable.