Will Chapter 13 Stop Foreclosure
This article covers the ins and outs of how chapter 13 may work with stopping foreclosure and what steps can be taken.
Whenever people are in financial difficulty for whatever reason, bankruptcy has often been the first dreaded word that popped into their minds. Today, that first dreaded word has been replaced by “foreclosure” and the question that plagues most homeowners is will Chapter 13 stop foreclosure proceedings. Bankruptcy means that all bills are wiped out. A good credit record must be established before any bank or other lending institution is willing to trust the borrower again. Today, the most common reason for bankruptcy is because of foreclosure. Most people would do anything and everything to avoid uprooting the family and being homeless. The courts have established several steps available to financially strapped individuals. One Chapter, Chapter 13 in particular, will give you a helpful answer to the question of “Will Chapter 13 Stop Foreclosure?”
What Are The Consumer’s Options?
The courts have established several relief laws so that people have some course toward a normal life again.
- Chapter 7 - This is one of the more radical ways to relieve your debt. It calls for the liquidation of your unexempt property in order to satisfy the accumulated debt for the individual creditor. After this has been done, the debtor is free of his or her debt. He or she needs to start from the beginning with regard to building credit.
- Chapter 11 - Filing Chapter 11 usually involves businesses and is close to Chapter 13 for individuals that do not meet the Chapter 13 debt limits.
- Chapter 12 - More specified toward a particular group of debtors, Chapter 12 should be used by farmers or family fishermen. Chapter 12 is an easier and more direct path toward solving the financial problem than that of Chapter 11. Chapter 12 is specifically geared toward farming and fishing as the main source of income.
- Chapter 13 - Will Chapter 13 stop foreclosure? Filing under this chapter is a milder solution to your financial problems. Unless foreclosure proceedings began prior to filing for Chapter 13, you may keep your home and keep all the things you have. One requirement is attending financial counseling six months prior to filing for this chapter. It permits the person filing for relief to pay off their debt but at a slower and more feasible schedule.
- Chapter 15 - Filing this chapter is more complicated and refers to crossing borders, i.e. international law.
To Answer The Question “Will Chapter 13 Stop Foreclosure?”
The simple answer is yes with a caveat. If the creditor has begun foreclosure proceedings prior to filing for Chapter 13, then Chapter 13 is not necessarily protective against foreclosure.