In many areas devastated by the foreclosure crisis families have been sent through the ringer looking for help. Luckily, filing for bankruptcy is one option that can help stop a foreclosure and assist in developing a plan to get caught up on mortgage debts.
Keeping Your Home
If you are considering filing for bankruptcy to help with an impending foreclosure, you can find help in either Chapter 13 or Chapter 7. While a Chapter 13 bankruptcy will allow you to repay your missed mortgage payments in a series of smaller payments over a period of a few years, the lengthy payment process can be stressful for some. Also, all of your debts will be rolled into the monthly payment, along with your missed mortgage debt payments, which can mean higher payment requirements. If you don’t make enough money to sustain a payment in Chapter 13, you may find that Chapter 7 is a better alternative.
Unlike Chapter 13, most of your debts can be eliminated in Chapter 7 with little expense to you. That is to say that, in Chapter 7, most of your debts will be erased by creditors or satisfied through liquidating non-essential assets. When these other debts are resolved without the requirement of being repaid in full, you will have more money freed up to put towards your missed mortgage payments. Dealing with a foreclosure in Chapter 7 will require you to pay towards your mortgage debts if you intend to keep the home, but you will be able to do so without the stress of additional debt liabilities.