Your home is likely the most valuable asset you have. It is also most likely to be the most expensive. Mortgages can cost hundreds or thousands of dollars a month, and if you are already having trouble making ends meet, you may find that you don’t have enough to cover this massive payment.
Unfortunately, if you miss too many payments, there is a risk that you could face foreclosure. Many mortgage companies will work with you to try to set up a new payment plan, and there are other options, like refinancing, that could help lower your payment. If you’ve tried those methods and still face foreclosure, then it’s time to look into bankruptcy for help.
How does bankruptcy help with foreclosure?
One type of bankruptcy that will help you with a foreclosure is a Chapter 13 bankruptcy. This form of bankruptcy sets you up on a three-to-five-year payment plan that your creditors must accept upon court approval. This payment plan may include your mortgage payments in a reduced form.
If you don’t go through bankruptcy, you may find that the mortgage company asks you to pay a large lump sum to catch up on past-due payments. You might not be able to catch up, especially with the fees and fines that are added to that debt. The court, however, can help you get back on track so long as you can show that you will be able to make ongoing, regular payments on the new, lower payment plan.
If your home is at risk of foreclosure, don’t wait to act. You need to file for bankruptcy prior to the sheriff’s sale or foreclosure date to save your home.