Chapter 13 bankruptcy is a reorganization bankruptcy option that can help the filing party reorganize their debts and repay them over a more manageable period of time. In addition to helping the filing party enjoy debt relief, Chapter 13 bankruptcy may also provide relief for foreclosure concerns and other worries the filing party may have.
Chapter 13 bankruptcy provides several important protections filing parties, and those considering personal bankruptcy protection, should be familiar with. Additionally, Chapter 7 bankruptcy may serve as another option that provides many of the same protections. Filing parties should be familiar with the different options to determine which best serves their needs and goals for the process. Protections of Chapter 13 bankruptcy can include:
This blog has previously discussed that personal bankruptcy protection includes protection form creditors. During the Chapter 13 bankruptcy process, while the filing party is working out a repayment plan with the bankruptcy court, creditors are preventing from pursuing collection actions against them.
During process of developing a repayment plan, the automatic stay can also provide relief for concerned homeowners to prevent foreclosure proceedings. In the longer term, once the repayment plan has been confirmed by the bankruptcy court, the filing party may be able to pay back the missed mortgage payments over the life of the repayment plan which may be able to save a family home from the foreclosure process.
Chapter 13 bankruptcy also provides a debt discharge at the end of the process once the filing party has complied with the terms of their repayment plan worked out with the bankruptcy court. Because of the variety of protections Chapter 13 bankruptcy can provide, filing parties should be familiar with how the process works and how it can help them with the stresses and strains of overwhelming debt and the prospect of losing a family home.