When you are facing a significant debt struggle, you may feel a lot of stress over how it may affect not only your financial stability, but your status as a homeowner. Creditors are keen to take control of your home and post it for sale once they find out that you are struggling with debt. As a bankruptcy lawyer such as one from The Law Offices of Neil Crane can explain, filing for Chapter 13 bankruptcy is one option people resort to if they want to keep their home. While there are several options you can utilize to save your home, Chapter 13 bankruptcy comes with a number of legal protections.
How does Chapter 13 stop foreclosure?
If you are facing serious financial hardship as a homeowner, the risk of home foreclosure can seem like a looming threat. Debt can make it difficult for you to pay your mortgage, and this can catch the attention of creditors. Banks and the government have the power to take control of your home if you are not able to make your mortgage payments consistently and on time.
You may be able to halt or stop the foreclosure process if you can file for Chapter 13 bankruptcy and meet the eligibility requirements for a repayment plan.
An automatic stay is an order that is triggered when you file for Chapter 13 bankruptcy. Automatic stays go into effect when you file for Chapter 13 bankruptcy. This means that all collection actions, such as messages, phone calls and notices will be prohibited. It prevents creditors from putting up a foreclosure notice and conducting any other attempt to sell your property.
Is an automatic stay permanent?
While an automatic stay does stop collection attempts, it is not permanent. The stay usually lasts about 30 days. It also does not guarantee that a mortgage lender will stop the foreclosure process. If they obtain permission from the court, they may still be able to proceed with a home foreclosure.
How can Chapter 13 bankruptcy help me modify my mortgage?
Chapter 13 bankruptcy also allows you to make changes to your current mortgage. Homeowners who file for bankruptcy can modify their mortgage so that their payment reflects their current financial situation.
Bankruptcy is only one of a few ways you can avoid foreclosure and save your home. Contact a top-rated and qualified bankruptcy lawyer to learn more about the process and requirements for Chapter 13 bankruptcy.