When you are facing financial difficulties in Mississippi, you may find that you also face the foreclosure of your home. Sometimes in this situation, you may want to consider declaring bankruptcy. We at the Pond Law Firm understand that you have many questions about Chapter 13 bankruptcy and how it can affect your foreclosure.
Although you may view bankruptcy in a negative light, this situation is not always negative when your home is being foreclosed on. FindLaw says that this is because you receive an Order for Relief after you begin the bankruptcy process. This means that your creditors cannot collect money from you. When you file for Chapter 13 bankruptcy, you typically establish a new payment plan for your debt. It is important to remember that this payment plan includes the mortgage payments you make each month, as well as the payments you have missed. While bankruptcy can postpone the foreclosure process for a few months, you still need to have the income necessary to make these payments.
One of the benefits of Chapter 13 bankruptcy is that you can determine the amount of time you have to repay missed payments. Additionally, if you have more than one mortgage, these debts can become unsecured debt. Usually this can happen only if your home’s equity is entirely taken up by the first mortgage. In this situation, you may not always need to pay back this new unsecured debt because it is not prioritized as highly as your first mortgage.
When you file for Chapter 13 bankruptcy, you usually have between three and five years to repay your debt. Additionally, your debt can be consolidated. More information about this subject can be found on our webpage.