When most people think of bankruptcy, they think of a chapter 7 Bankruptcy. A Chapter 7 is when the court seizes assets and eliminates the associated debt. This type of bankruptcy can stop foreclosure, but most people want to keep their home. This is where a chapter 13 bankruptcy can help. A chapter 13 bankruptcy allows the homeowner to keep their home and establishes a repayment plan with the lender. During the Chapter 13, the homeowner will not have a lot of extra money, but the court will make sure they’re left with enough to live on and pay their bills. A Chapter 13 Bankruptcy gives the homeowner a chance to get their affairs back in order and the time needed to recover from the hardship.
Bankruptcy has been a somewhat negative topic with homeowners, but bankruptcy was designed to help people through a hardship when they have nowhere else to turn. In my experience, this is exactly the situation foreclosure victims have found themselves in. We’ve been brought up to believe that we should always pay our debts and to not pay for our debts is shameful. This is one reason people have such a low opinion of bankruptcy and the people who file bankruptcy. But bankruptcy is a legal option that was established to help those in need. It is not shameful to file a chapter 13 bankruptcy. It shows that you are responsible for your debts and you will do whatever it takes to pay them. Another negative aspect of bankruptcy is that it causes a drop in credit score, but when someone is facing foreclosure, their credit score is already very low. In reality, a bankruptcy could improve a foreclosure victim’s credit, or at least speed up the recovery process. The bottom line is: when a man is faced with losing his home and moving his family into the streets, he should embrace the legal system and take full advantage of any assistance it can offer.
A chapter 13 bankruptcy is not the only option to stop foreclosure, but it is considered one of the top ways to stop foreclosure and it can be considerably less expensive than other alternatives. When compared to other options, such as loan modification, refinance, or forbearance agreements, bankruptcy is easily the fastest and most reliable option when it comes to saving your home from foreclosure.
If you are facing foreclosure then you owe it to yourself and your family to speak with an attorney and discuss the option of Bankruptcy. Your initial consultation should always be free and you should never work with an attorney you don’t trust, so feel free to meet with several attorneys before you make any decisions. Bankruptcy is not for everyone, but it has helped many families save their home from foreclosure and gives them the second chance they are desperately looking for.