Two Types Of Bankruptcy To Avoid Foreclosure
There are two different forms of bankruptcy that can help you avoid foreclosure and freeze the process to by you some time. I will talk about Chapter 13 foreclosure, and then go into the Chapter 7 process.
Chapter 13 bankruptcy lets you pay off the late payments over the length of a repayment plan you propose. However, you'll need to make sure that you enough income to meet your current mortgage because you will be paying the past due mortgage at the same time. Chapter 13 may also help you pay down your second or third mortgage. This is possible if your first mortgage is secured by the entire value of your home. That allows the Chapter 13 court to take off the second and third mortgages and re-categorize them as unsecured debt.
Filing for Chapter 7 bankruptcy will at least stall the sale and give you two or three more months to work things out with your lender. It will also help you save up some money during the process and cancel debt secured by your home. During a Chapter 7, you can live in your home for free during at least some of the months while your bankruptcy is pending and in many cases several more after your case is closed. You can then use that money to find another place to live. Chapter 7 will also cancel all the debt that is secured by your home.
Filing bankruptcy should be the last resort for your situation. However, if you are considering it, you will want to familiarize yourself with bankruptcy so you know what to do.
Chapter 13 bankruptcy lets you pay off the late payments over the length of a repayment plan you propose. However, you'll need to make sure that you enough income to meet your current mortgage because you will be paying the past due mortgage at the same time. Chapter 13 may also help you pay down your second or third mortgage. This is possible if your first mortgage is secured by the entire value of your home. That allows the Chapter 13 court to take off the second and third mortgages and re-categorize them as unsecured debt.
Filing for Chapter 7 bankruptcy will at least stall the sale and give you two or three more months to work things out with your lender. It will also help you save up some money during the process and cancel debt secured by your home. During a Chapter 7, you can live in your home for free during at least some of the months while your bankruptcy is pending and in many cases several more after your case is closed. You can then use that money to find another place to live. Chapter 7 will also cancel all the debt that is secured by your home.
Filing bankruptcy should be the last resort for your situation. However, if you are considering it, you will want to familiarize yourself with bankruptcy so you know what to do.
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