If you were to fall severely behind on your mortgage, your creditors may wish to force the sale of your home to pay your debts. Although an effective option for creditors, foreclosures are devastating for homeowners. Chapter 13 bankruptcies have the unique ability to not only help you get rid of debt, but also put a stop to foreclosures, and our Arkansas debt relief team explains how below.
The Chapter 13 Process
Chapter 13 is referred to as the “reorganization” chapter of the United States Bankruptcy Code. It takes a little longer to complete, around 3-5 years, but in doing so, it grants filers the time they need to catch up on their finances.
This chapter is best suited for those with a regular income that allows them to repay a portion or all of their debts through the court-approved payment plan. This new payment plan restructures your current plan and extends the life of your payments to keep you from falling further behind.
As long as payments are made on time, you will be able to pay off your debts and set yourself up for long-term financial success.
One of the first ways Chapter 13 bankruptcies halt foreclosures is by the automatic stay. It is a provision available to filers of every chapter of bankruptcy and blocks your creditor’s ability to contact you or make any collection actions on your debts. This provision goes into effect as soon as your bankruptcy papers are filed and continues throughout the duration of your bankruptcy.
Chapter 13 bankruptcy also does not require you to liquidate any of your assets, unlike other chapters, meaning you are able to pay back your mortgage through your payment plan without forfeiting your home. These payments are typically lower than what you originally paid, making it even easier for you to be financially free.
Contact our Arkansas Bankruptcy Team Today
We know how stressful the threat of foreclosure is for many homeowners, and you can count on the team at Martin Attorneys, PA to find creative and effective strategies to help you keep your home in your hands.
To find out how we can guide you through the Chapter 13 bankruptcy process, contact our seasoned team today through our website or give us a call at (479) 888-2039!