Your home is probably your most important asset, not just in monetary terms but because it is where you and your family live.
If you are fighting significant debt problems, filing for Chapter 13 bankruptcy protection may be the solution—and you would be able to keep your home.
Noting the differences
You have some choices when you decide to file for bankruptcy. Most people choose either Chapter 7 or Chapter 13. With either of these, you will stop creditor harassment and put a halt to the threat of foreclosure. Chapter 7 allows you to liquidate your unsecured debt such as medical bills. However, whether you can keep your home when filing Chapter 7 may depend on the level of equity there is as well as your record for making regular mortgage payments. On the other hand, Chapter 13 works as a monthly debt repayment plan, which helps to save your home from foreclosure.
Understanding how Chapter 13 works
With the guidance of your trustee, you will create a structured payment plan that will continue for three to five years. You will use this plan to repay your unsecured debts to creditors.
Looking at Chapter 13 advantages
With Chapter 13, you can take more time to repay your debts. Your trustee may even allow you some flexibility in this regard. Once you complete the established payment plan, your debtors cannot obligate you to pay any remaining balance.
Following the plan
Keep in mind that as long as you follow the Chapter 13 plan and make regular payments, you can keep the property on which you are making those payments, such as your home or your vehicle. The process will ultimately help you rebuild your credit and lead you into a more secure financial future.