can potentially help you save your home from foreclosure, but it depends on the specific circumstances and the type of bankruptcy you file for. There are two common types of bankruptcy that individuals can file for
Chapter 7 and Chapter 1
Chapter 7 Bankruptcy
This type of bankruptcy is also known as liquidation bankruptcy. It involves the sale of non-exempt assets to repay creditors. While Chapter 7 can provide temporary relief from foreclosure, it does not offer a long-term solution to save your home. However, it can delay the foreclosure process, giving you some time to explore other options.
Chapter 13 Bankruptcy
This type of bankruptcy is also known as reorganization bankruptcy. It allows individuals with a regular income to create a repayment plan to pay off their debts over a period of three to five years. Chapter 13 bankruptcy can be an effective tool to save your home from foreclosure. When you file for Chapter 13, an automatic stay is put in place, which halts the foreclosure process. You can then propose a repayment plan that includes your mortgage arrears, allowing you to catch up on missed payments over time while continuing to make regular mortgage payments.
To successfully save your home from foreclosure through Chapter 13 bankruptcy, you need to meet certain requirements
Regular Income
You must have a steady income to demonstrate your ability to make the proposed repayment plan.
Feasible Repayment Plan
Your proposed repayment plan must be realistic and feasible, ensuring that you can afford to make the required payments.
Mortgage Arrears
Chapter 13 allows you to include your mortgage arrears in the repayment plan, giving you an opportunity to catch up on missed payments.
Current Mortgage Payments
You must continue making your regular mortgage payments during the bankruptcy process.
By filing for Chapter 13 bankruptcy and adhering to the repayment plan, you can potentially save your home from foreclosure. However, it is crucial to consult with a bankruptcy attorney who can guide you through the process and help you determine if bankruptcy is the right option for your specific situation.