Posted on: 21 October 2018
Sometimes life gets complicated and you end up with financial problems you can't take care of on your own. If you are feeling trapped and like you are drowning in debt, your only option may be a bankruptcy. A Chapter 13 bankruptcy is a good option when you have a home you want to save but already have a lot of missed payments you need to make up. With a Chapter 13, you will be given the opportunity to pay all the payments you have missed over the course of three to five years. To help you understand why a Chapter 13 may be better than a Chapter 7, here are a few things you need to know.
In a Chapter 13 bankruptcy, you will be required to list all your debts and all your income, The court will then decide how much you need to pay each month to pay back your creditors. They will also determine how long you need to pay this amount. The amount you end up paying may not cover the entire debt, but the remainder will be discharged at the end of the repayment period. You make the payment every month to a trustee who then divides the money between the creditors. You never have to deal with the creditors again.
Paying the Mortgage
Even though any missed payments will be taken care of with the bankruptcy, you must continue to make the monthly mortgage payments as they become due. In other words, you cannot miss any more payments. However, if there is a second mortgage, this payment may be included in the bankruptcy so you won't have to worry about continuing to pay it.
Without the second mortgage and the back-owed amount, you may now be eligible to refinance the property. The house will not need to assess at as high an amount either because you won't owe as much on it. In addition, getting your debt under control with the bankruptcy will help you look better to potential lenders.
Stop the Bankruptcy
If you needed to file Chapter 13 to stop the foreclosure of your home just long enough to do a short sale or to find someplace to live, you can always file and then stop it. The filing will keep the home from foreclosure and then stopping it will keep the bankruptcy off your credit report.
Deciding to file bankruptcy is never easy. However, staying in debt and stressing over it can be detrimental to your overall health. Contact a lawyer who specializes in Chapter 13 bankruptcy services to find out how much it can help change your life. A firm, like Lifeline Legal LLP, can help.Share