You may think if you file for bankruptcy that you’ll be forced to give up your home.
Not all types of bankruptcies are the same, and depending on your circumstances, you may be able to protect your home from foreclosure and still get the financial help you need. Read on to learn more.
Chapter 13 Bankruptcy Can Help You Retain Your Home
As long as you have a steady flow of income, you should be able to file for chapter 13 bankruptcy. Under chapter 13 bankruptcy, you can create a plan to pay back some or all of your outstanding debts. Because you will have a plan to clear your debts, you can save your home from foreclosure.
The repayment period will depend on your income level. If your monthly income doesn’t meet the state median, you will be given three years to repay your debts. If your monthly income exceeds the state median, you should have five years to repay what you owe. No matter how much money you make, five years is the maximum amount of time the courts will allow you to repay your debts under chapter 13 bankruptcy. There are no exceptions to this rule.
Under Chapter 13 Bankruptcy, You Can Repay Your Mortgage Debts Over Time
Under chapter 13, you have the opportunity to eliminate delinquent mortgage payments over time. However, it’s important to keep in mind that all mortgage payments must be made before their respective deadlines.
Chapter 13 Bankruptcy Protects You From Debt Collectors
During the repayment period, debt collectors will not be allowed to start or continue collecting payments from you.
Similarly, chapter 13 contains a special automatic stay provision in order to help protect co-debtors. A creditor may not try to collect a consumer debt from someone who is liable alongside the debtor. Consumer debts include those that are incurred as a result of personal, family, or household needs.
If you are in financial turmoil and need help getting your head above water, we may be able to help you. Don’t hesitate to reach out to our skilled team right away with any questions you may have.