If you are facing foreclosure, filing for bankruptcy under Chapter 13 places an “automatic stay” on your home. This stops the foreclosure process. Creditors are paid pursuant to a Chapter 13 Plan that is determined by the debtor and his or her attorney. The Plan is normally 36 to 60 months long and must be approved by the Court.
Usually, the Plan has very favorable repayment terms such as reduced interest on car payments and in many cases no payment to unsecured creditors like credit cards and medical bills.
The Chapter 13 Bankruptcy Plan also allows people to catch up on any delinquent house payments. This can rescue your home from foreclosure. If the value of your home is less than what you owe on your first mortgage, you may be eligible to eliminate your second and third mortgages and/or home equity loans. This option may save you tens of thousands of dollars.
Contact King & King today for more information.