Chapter 13 – Avoid foreclosure
Chapter 13 bankruptcy should be a last resort for when speaking of a foreclosure. In the majority of cases, an automatic stay is introduced as soon as the chapter 13 bankruptcy petition is filed. The automatic suspension will temporarily stop foreclosure, together with all the action collection, regardless of the phase of the foreclosure process.
The way it works chapter 13 bankruptcy is the debtor must file a proposed plan, stating your income, deductible expenses of life, and the proposed payments to the trustee for the benefit of creditors. The current payments must be current after the chapter 13 bankruptcy petition is filed.
This does not necessarily mean that stop paying the mortgage. Owners should do all the mortgage payments due during chapter 13 bankruptcy repayment plan, and the failure to make current payments on time can mean that the bankruptcy court lift the automatic stay and allows that the mortgage company to resume the foreclosure process. Therefore, you will need to make sure that you continue the payments.
In general, you can file a chapter 13 bankruptcy to stop foreclosure if you is employed or have sufficient income to make the chapter 13 payments plan, as well as all the current mortgage payments and living expenses, and if you don’t have debts in excess of the limits of statutory for chapter 13 bankruptcy. This is a strategy which could take if you need more time to catch up on their payments.