By Robert J. Semrad | Published October 01 2014 |
Bankruptcy Is the Most Effective Way to Stop Foreclosure
Chapter 13 bankruptcy was created specifically with the idea of helping people hold on to their possessions, including their homes. Unlike Chapter 7, which can require the liquidation of certain assets in order to repay creditors, Chapter 13 helps debtors protect valuable property while they make affordable monthly payments toward debt. In fact, a legal action called the automatic stay goes into effect immediately upon filing to actually pause foreclosure proceedings and other collection activities.
But the main benefit of bankruptcy is that it buys time to catch up on payments, especially if debtors are able to discharge other debts through the Chapter 13 plan, thereby freeing up more money to devote to a mortgage.
While it’s true that bankruptcy will go on your credit record after you file, it can also help you rebuild credit after you find debt relief. With debts discharged, some homeowners find that qualifying for previously unavailable options such as loan modification is now possible.
Of course, bankruptcy isn’t right for everyone. It won’t discharge student debt, for instance – a problem increasingly plaguing young homeowners. But if you also have credit card debts, payday loans, medical bills and other unsecured debts, bankruptcy may be able to provide the breathing room you need to get caught up on payments and back on your feet.
If you’re facing foreclosure and would like to save your home, contact DebtStoppers today to speak to an experienced foreclosure attorney – and learn what bankruptcy can do for you.
Bankruptcy can save your home from foreclosure, by Dan Rafter, HSH.com