Filing Chapter 13 is often considered as an option for those facing foreclosure, as Chapter 13 protection offers a tool called the automatic stay to halt foreclosure proceedings and other debt collection measures currently underway against the debtor. It is a powerful tool for those facing steep mortgage debt who may have fallen behind on their payments, but it is important to understand the strengths and weaknesses of Chapter 13 in delaying or preventing foreclosure in order to decide whether it is the best path for you.
Chapter 13 & Foreclosure
Talking to your Tampa bankruptcy lawyer is a great step toward understanding how a Chapter 13 filing could help your situation with respect to your late mortgage payments and potential foreclosure. Typically, a bankruptcy lawyer will advise Chapter 13 filing if you are late on mortgage payments and cannot get caught up, and you have enough income to manage the restructured repayments that you will need to make once the filing is complete. If you do have the ability to make the payments that Chapter 13 requires, over a three to five year period, you can get your mortgage payments current again and stay out of foreclosure.
At the end of the repayment period any remaining debts are discharged and you are back on your feet financially. This is a great option for many who have fallen behind and cannot catch up without intervention, and your bankruptcy lawyer will help you determine if your financial situation merits such a course of action. Chapter 13 to stay out of foreclosure is not the correct option for everyone, so be sure to do your research and talk to your bankruptcy lawyer before making a decision.