You might run into tough financial times because of mounting bills, perhaps from health care costs. Such burdensome debt can make it hard to pay off your mortgage, and your bank is considering foreclosing on your home. Fortunately, saving your home is a possibility if you file for Chapter 13 bankruptcy.
Assuming you have enough income to qualify for Chapter 13, it is possible to stop a foreclosure once a court grants your bankruptcy, though it will depend on your current situation. Here is a look at how Chapter 13 bankruptcy may be of assistance.
Stopping foreclosure in bankruptcy
The US Courts website explains that Chapter 13 can stop foreclosure proceedings and allow you time to pay back all the payments you owe. Still, you must continue to pay your regular mortgage bills on time during your bankruptcy. Failing to do so could cause the bank to take your home. Also, you must file for bankruptcy before your bank completes a foreclosure sale or the bankruptcy may not save your home.
Stopping foreclosure by negotiating
Your bank is probably not eager to foreclose on you. You might consider negotiating with your bank to help you make up missed payments. Some banks have special programs to help people who have fallen on hard times. You might be able to lower your current mortgage payments by spreading out your outstanding mortgage into smaller payments over a greater period of time.
Since Chapter 13 bankruptcy requires you to come up with a repayment plan to pay off your debts, you should have a good idea of how much you can spend in mortgage payments given your financial situation. This knowledge may help if you negotiate a new payment schedule with your bank.