Debt problems can affect many areas of your life, including your homeownership status. If you have fallen behind on your mortgage payments, there’s a good chance you will eventually receive a foreclosure notice from your lender. Fortunately, filing a Chapter 13 bankruptcy offers an effective solution for saving your home. As long as a foreclosure attorney determines you are eligible to file, this will allow you to reorganize your debts into a repayment plan and give you time to cure your mortgage arrears over a three- to five-year period. Here is an overview on how Chapter 13 bankruptcy works to stop foreclosure efforts. 

How to Use Chapter 13 Bankruptcy to Avoid Foreclosure 

Get an Automatic Stay to Halt Foreclosure Proceedings 

Once a Chapter 13 bankruptcy is filed, an automatic stay will be granted, prohibiting your mortgage lender from taking any further action towards a foreclosure sale. However, you must file before the property is sold or you will lose the ability to cure your loan default. Thoroughly review your notice to see how much time you have before the sale date to consult a foreclosure attorney and start the bankruptcy process. 

Catch Up on Missed Mortgage Payments With a Repayment Plan

In addition to stopping a foreclosure sale, Chapter 13 bankruptcy will allow you to catch up on missed mortgage payments. Upon court approval of your debt repayment plan, you will resume making ongoing payments to your lender. While you work to cure your arrears, you will also be making the regular mortgage payment. After rearranging your debts, the loan payments you are responsible for will become much more manageable, and you will have three to five years to make up what you owe. Once you have fulfilled the obligations of your repayment plan, you will be able to keep your home.                   

Seek legal advice from an experienced foreclosure attorney as soon as possible if you’re facing foreclosure. Greg Dunn, Bankruptcy and Debt Relief Attorney in Honolulu, HI, will carefully assess your situation and explore your options to see if bankruptcy is the right choice. If so, he will help you structure a repayment plan and work to guide you through the Chapter 13 filing process swiftly before any foreclosure sale takes place. Call (808) 524-4529 to speak with a foreclosure attorney who has experience handling thousands of cases similar to your own, or visit his website for more information on Chapter 13 bankruptcy.