Are you trying to save your home from a foreclosure? If so a Chapter 13 repayment plan may be the answer. Read below to find out how filing a Chapter 13 bankruptcy might be able to save your home.

Chapter 13 is an interest-free debt repayment plan through which you consolidate your debts and make a payment on your debt over a three to five year period. While in a Chapter 13 debt repayment plan, the creditors cannot collect from you, and a Federal Court order requires creditors to adhere to the terms of the plan.

One very important thing to remember about Chapter 13 bankruptcy is that you must be working or have a consistent source of income for your repayment plan to be approved by the court. Not only must you be able to pay for your monthly living expenses, but you must also be able to make a payment to the court to consolidate your debts.

Debts that are generally consolidated in a Chapter 13 are mortgage arrears, balances on vehicle loans, student loans, credit card debts and other unsecured debts. All outstanding debts must be included in the Chapter 13 consolidation.

Read below to find out more detailed information about the benefits of Chapter 13:

Stop Foreclosure Immediately

If your home is presently in foreclosure, a Chapter 13 bankruptcy filing will stop the foreclosure any time prior to the sale, and allow you to repay your mortgage arrears through your Chapter 13. You will still be obligated to make all future mortgage payments directly to the Mortgage Company, but they may not foreclose to collect any outstanding mortgage payments.

As long as your equity in the property is fully exempt, you will not lose your home during your bankruptcy. You may still be able to keep your property even if your property is not fully exempt by filing a Chapter 13 Bankruptcy instead of a Chapter 7 Bankruptcy.

Beware of Refinancing

If you have equity in your home, you can file a Chapter 13 bankruptcy, protect your equity, and repay your mortgage arrears over as long as three years. Refinancing or taking out a second mortgage may just create an additional mortgage payment that you cannot afford, instead of repaying your mortgage arrears through a Chapter 13.

Why eat up your equity with another mortgage? You should explore all of your options, and make sure you contact us along the way so we may advise you of your legal rights. When you have quality legal representation, you become knowledgeable about your rights, and become less vulnerable to people trying to take advantage of you in a time of distress. Please remember that we offer a free consultation. Explore Chapter 13 bankruptcy as an alternative to a high-interest rate equity loan against your home.