Why should homeowners consider Chapter 13?

As a homeowner, it can be particularly intimidating to face financial difficulties. A home is many Southaven residents' biggest investment, and the thought of losing one's home can be overwhelming. Those in need of debt relief may consider Chapter 13 bankruptcy as a potential way to hold onto their home while also building a new financial future.

Why choose Chapter 13 over Chapter 7? No bankruptcy case is exactly the same, so debtors may consult with a qualified Mississippi bankruptcy attorney for information regarding their legal options. For those who are especially interested in bankruptcy's ability to stop foreclosure in some cases, filing for Chapter 13 might be an option. In many bankruptcy cases, the debtor's action of filing Chapter 13 stops a foreclosure - permanently.

After filing for Chapter 13, what is known as an "automatic stay" temporarily halts the foreclosure. The court then makes a confirmation of the filer's repayment plan, one of the essential elements of Chapter 13 bankruptcy. Under Chapter 7, lenders often ask the court to lift the automatic stay so that foreclosure proceedings can continue. Under Chapter 13, though, if the debtor's plan is confirmed, it can outline how missed payments will be repaid and, thus, the home can often be retained by the debtor.

In addition to stopping foreclosure, Chapter 13 can also put an end to threats of wage garnishment or repossession. Many debtors find that keeping what is near and dear to them can be very reassuring during the bankruptcy process. A Chapter 13 bankruptcy attorney can offer legal advice regarding how to file, how to reduce debt and what types of personal property can be kept during the financial reorganization.

Source: FindLaw, "Chapter 13 vs. Chapter 7 Bankruptcy," accessed Oct. 5, 2015

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