How a Chapter 13 Bankruptcy Can Help Save Your Home

 Posted on August 09, 2023 in Foreclosure

For homeowners facing the possibility of foreclosure, Chapter 13 bankruptcy is a potential lifeline. This debt reorganization plan offers a fresh chance to regain control of your financial situation and safeguard your home from repossession. If you are in danger of losing your home, exploring Chapter 13 bankruptcy could be the solution you have been seeking.

Understanding Chapter 13 Bankruptcy

Chapter 13 bankruptcy presents a structured strategy for debt repayment. Spanning a period of three to five years, this plan enables you to create a practical repayment schedule, encompassing all your creditors, including your mortgage lender. As an advantage, your monthly payments are determined based on your income and expenses, making them more manageable.

After completing your Chapter 13 bankruptcy plan, outstanding balances for certain debts may be discharged as long as certain criteria have been met, including meeting all domestic support obligations and the completion of an approved financial management course. There are some debts that cannot be discharged, including home mortgages, child support and alimony debt, certain taxes, student loans, and more.

How Does a Chapter 13 Bankruptcy Help Save My Home?

The prospect of saving your home through Chapter 13 bankruptcy is complex.

Falling behind on mortgage payments can be a distressing experience. Chapter 13 bankruptcy offers a window of opportunity to catch up on missed payments. Within a span of three to five years, you can gradually repay your mortgage debts.

For homeowners grappling with unmanageable mortgage payments, Chapter 13 bankruptcy steps in to alleviate the pressure. By extending the loan's term, this approach effectively lowers your monthly payments, making them more budget-friendly.

Filing for Chapter 13 bankruptcy triggers an automatic stay, preventing your mortgage lender from proceeding with foreclosure. This protective barrier offers you the time you need to structure a workable repayment plan and regain control of your financial affairs.

Additional Factors to Weigh

As you think about Chapter 13 bankruptcy, several factors warrant consideration:

• You must have enough income to make payments under a Chapter 13 repayment plan.
• Your unsecured debts must be less than the value of your assets.
• While Chapter 13 bankruptcy does impact your credit score, it is often less damaging than foreclosure's severe toll.

Is Chapter 13 Bankruptcy a Viable Path for You?

While Chapter 13 bankruptcy holds promise, it is not a one-size-fits-all solution for homeowners facing foreclosure. Yet, if you are wrestling with mortgage payments and you want to retain your home, this option is well worth exploring.

It is pivotal, however, to consult with a legal professional when considering Chapter 13 bankruptcy. A seasoned attorney can provide personalized insights into your situation. Their advice can help you make a better-informed decision and guide you through the bankruptcy process.

Contact a San Antonio, TX Bankruptcy Attorney

Facing foreclosure is undoubtedly a difficult experience. If you believe that Chapter 13 bankruptcy could be your lifeline, it is important to act swiftly. The sooner you initiate the bankruptcy process, the quicker you can halt foreclosure and begin to reclaim ownership of your home. A San Antonio bankruptcy attorney can help expedite the process. Contact the Law Offices of Chance M. McGhee at 210-342-3400 for a free consultation to discuss your unique situation.

Source:

https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics