When a family faces the threat and fear of foreclosure, it can be unsettling and stressful. The harm of losing a family home can seldom be overstated. Chapter 13 bankruptcy is one resource that may be useful to help avoid the foreclosure of a family home. Chapter 13 bankruptcy can provide foreclosure assistance to a family struggling to make their mortgage payments.
Once a bankruptcy filing is made, an automatic stay goes into effect that prevents any further creditor collection actions during the bankruptcy process. The process then allows the filing party to make mortgage payments going forward and whatever they owe can be paid over a 3 to 5 year period according to the repayment plan developed as part of the bankruptcy process. Chapter 13 bankruptcy can have a number of useful purposes depending on the goals of the filing party.