When a homeowner or consumer has fallen behind on home or car payments, they may wonder what to do. The reality is that different personal bankruptcy protections and options may be able to help them with the challenges they face and to hold onto a family home or vehicle they need to get to work every day.
Life circumstances can change quickly and leave struggling homeowners and consumers unable to meet their financial obligations. They may be facing foreclosure of their home or repossession of their vehicle. As a result, it is essential that they are familiar with personal bankruptcy protection options and how they can help them. There are generally two types of bankruptcy protection options that can help meet the needs of struggling consumers in different situations.
A Chapter 13 bankruptcy allows the struggling homeowner to reorganize their debts and repay it over a period of time as outlined in the reorganization plan worked out between the filing party and the bankruptcy court. This process may allow time for the filing party to catch up on mortgage payments and save their family home. Chapter 7 bankruptcy protection is a liquidation bankruptcy option but the liquidation process is subject to certain exemptions including a certain amount of equity in a home or value in a car.
It is important for homeowners who think they may lose their home or consumers who are worried about losing their car to be aware of the ways personal bankruptcy options may help. They should also be familiar with the different option and which is best for their goals for the bankruptcy process which may be able to help them protect the things they care about and enjoy a fresh financial start.