It’s a financial nightmare no one wants to live through: the prospect of losing your home. But it can happen to the best of us – and often for reasons beyond our control. Perhaps you lost your job or received a devastating medical diagnosis. Maybe your credit card debt spiraled out of control. Before you know it, you’re no longer able to make your mortgage payments. Your home – the very center of your life and family – is in jeopardy.
Scary as your situation may seem, you should never assume there’s no way out. Chapter 13 bankruptcy may be a way to keep your home and get your finances back on track.
The truth about bankruptcy
A common myth about bankruptcy is that you’ll lose everything. Thankfully, that’s not the case.
Chapter 13 – one of the two common types of consumer bankruptcy – is designed to help people catch up on mortgage payments and avoid foreclosure. It’s geared toward income-earners who own a home but have stumbled on tough financial times.
How it works
Through Chapter 13, you’ll have an income-based repayment plan that establishes a single, affordable monthly payment for three or five years. This plan can give you valuable time to catch up on your mortgage payments without the threat of imminent foreclosure.
Loan modification may also be possible as another way to make your mortgage more affordable.
What if you’re already facing foreclosure?
Depending on where you’re at in the process, filing for Chapter 13 bankruptcy could potentially put a halt to foreclosure. Talk to a bankruptcy attorney about your specific situation.
