Facing Foreclosure? Chapter 13 Bankruptcy Can Help


There are many people across the country that are facing rough times in their lives due to the state of the economy. Many jobs have been downsized and even eliminated. Foreclosure has spread across the country claiming new victims daily. Many people feel like they have no choice but to accept the fact that they have lost their homes due to circumstances beyond their control. The banks say they will help people that fall behind in their payments but there is only so much they can do.

Chapter 13 bankruptcy is an option that many people are afraid to consider. They think they will lose all that they have anyway so why bother. This is simply not the truth. When you are faced with a foreclosure, a chapter 13 bankruptcy may be just what you need to get you through the tough times and back on the road to financial stability.

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A Chapter 13 bankruptcy allows you to pay off your debts for just pennies on the dollar. Once you have filed for bankruptcy, there is an order put in place that ends all harassing phone calls from creditors and that protects your home from foreclosure. As long as you continue to follow the steps involved in the bankruptcy filing you can stay in your home and get back on track.

In order to file Chapter 13, you must make a list of all creditors to which you owe money. This includes any old debt that has been following you around for years like old medical bills. You should include any loans, both secured and not secured, and the total amount that you are behind on your mortgage. All of these bills will be considered in the Chapter 13 bankruptcy. If your home is currently in foreclosure, you can halt all proceedings and let the government negotiate a payment schedule for you.

You may also decide to include any auto loans that you have. If you have had poor credit in the past and are paying a very high percentage rate on your vehicle loan, including it in the bankruptcy is a great idea because you will likely receive a lower interest rate and the payments will be included in your monthly Chapter 13 bankruptcy payment. This will all depend on the age of the vehicle and how much you owe on it but a bankruptcy attorney can give you all of the details.

Your bankruptcy attorney will calculate the total amount that you owe out to your creditors and any funds that will stop the foreclosure and will come up with a repayment plan. They will allow you money out of your income to live on and to pay your daily and monthly expenses like your utilities and the rest will be paid to a trustee that will apply the payments as needed. Your creditors will be sent a notice that you have filed for Chapter 13 bankruptcy and they will be given a deadline to submit their claim. If they miss the deadline, they miss their opportunity to collect and the bill will be cleared without payment.

Foreclosure is a monster that can be beat. Chapter 13 bankruptcy is one means to remove the threat and to relieve some pressure while you overcome the obstacle that got you into this position. It is nothing to be feared, and can actually give you a sense of relief.


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