Facing foreclosure is not only stressful but can also leave you feeling hopeless when you are unsure where to turn for help. There are many reasons why people fall behind on their mortgage payments. From medical bills to unforeseen financial burdens, thankfully, Chapter 13 bankruptcy can be an avenue to save your home. Here’s how the process works.
How Chapter 13 Bankruptcy Can Save Your Home
Chapter 13 bankruptcy, also known as reorganization bankruptcy, can allow you to catch up on your mortgage payments. After filing your petition for Chapter 13 bankruptcy, an “automatic stay” will immediately take effect. An “automatic stay” prohibits lenders from completing a foreclosure proceeding. Now you will be able to catch up on mortgage payments through a 3 to 5-year bankruptcy plan.
Can a Second Mortgage Be Discharged Through Bankruptcy?
If you’ve been struggling with making payments on your second mortgage, the good news is, bankruptcy can help. Bankruptcy law permits second mortgages to be treated as unsecured debt. Knowing how unsecured debt works in bankruptcy is important when deciding the best bankruptcy plan for your financial situation. Consulting a bankruptcy attorney can help you make the right decision.
Additional Benefits to Chapter 13 Bankruptcy
Not only can Chapter 13 save your home from foreclosure, but other benefits may further help your financial situation. Chapter 13 bankruptcy can:
- Stop harassing collector calls
- Stop repossession of your car and other property
- Co-signers will be protected from collections from creditors
- Alleviate credit card debt
- Stop wage and bank account garnishments
- Alleviate certain tax debts
If you’ve been struggling with making your mortgage payments, we can help. Having an experienced bankruptcy attorney on your side can make all the difference in the outcome of your case. Contact Wadhwani & Shanfeld today at (800) 996-9932 for a free consultation. We’ll answer all your questions and ease your financial concerns.