Thomas F. Miles, Attorney and Counselor at Law
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Chapter 13 bankruptcy can help with foreclosure concerns

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.

Chapter 13 bankruptcy is referred to as a reorganization bankruptcy which allows those who qualify to reorganize their debts into a manageable repayment plan which can provide much-needed debt relief. There are requirements to qualify to file for a reorganization bankruptcy and filers typically have a reliable source of income. In addition to providing foreclosure relief, Chapter 13 bankruptcy may allow the filing party to restructure their debts and enjoy a fresh financial start.

The prospect of losing a family home is unquestionably troubling. As a result, families should be familiar with the legal protections available to them which include Chapter 13 bankruptcy. While the bankruptcy process may seem complicated, and a potential filing party may have concerns related to it, it is important to be aware of the all of the legal resources available to help parties who are struggling financially and determine which option is best for them.

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Thomas F. Miles, Attorney and Counselor at Law
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El Cajon, CA 92020

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