Making the decision to file for bankruptcy can be difficult, but it may be your best option when you’ve been weighted down by debt and don’t see any other way out. What many people don’t realize is that bankruptcy may actually help you to keep your house. This is especially true when you file under Chapter 13 bankruptcy, otherwise known as wage earner’s bankruptcy.
Freeze Your Foreclosure Proceedings
The most immediate effect you will see after filing for bankruptcy is that all collection efforts by all creditors and lenders will cease immediately. This includes any foreclosure proceedings, even if the process is already well under way. When you file for bankruptcy, an automatic stay is placed on all of your creditors’ collection efforts. The automatic stay affords you time and reprieve from constant harassment and the impending timeline of debt collection and foreclosure proceedings.
Pay Back Your Debt
Chapter 13 may do more than just stall foreclosure proceedings. Under Chapter 13, the court will review your income, assets, and debts, and create a payment plan. Under this plan you will receive a portion of your income to live on, and the remainder is used to pay off your debts. You may be allowed to keep your home under this payment plan, although you will still have to make payments on your mortgage. The assets you keep vary from state to state, so be sure to consult with an experienced bankruptcy attorney to find out how Chapter 13 can help you.
Bankruptcy is a last resort, but it can change your life for the better. It may allow you to start a new chapter in your life, free from the debt that keeps you awake at night. To discuss your finances with a bankruptcy attorney, call the American Law Center at (909) 498-4566. Our Riverside representation is friendly, experienced, and ready to fight for your rights.