Maybe you found yourself facing a tough economy leading to layoffs. Or perhaps you incurred hefty medical bills after a serious illness. These are just some situations that can spell financial disaster. Homeowners in the Miami area in these situations may go from a comfortable standard of living to being unable to pay their mortgage. When missed payments add up, and the bank is threatening foreclosure, homeowners may wonder if there is anything they can do to save their home.
Chapter 13 bankruptcy and foreclosure
One option homeowners facing foreclosure may want to consider is filing for Chapter 13 bankruptcy. By doing so, an automatic stay will be issued that stops the foreclosure process starting at the time of the filing of the Chapter 13 petition. This gives the homeowner a chance to catch up on past-due payments over a reasonable time period.
There are caveats
However, there are some caveats to filing for Chapter 13 bankruptcy as a means of stopping foreclosure. First, if the foreclosure sale was completed before the homeowner filed for bankruptcy, Chapter 13 cannot get them back their home. Also, if the homeowner does not pay their regular mortgage payments after the Chapter 13 filing, they may still lose their home to foreclosure. Also, in some cases, it may be possible for a creditor to lift the automatic stay.
Deciding whether Chapter 13 is right for you
As this shows, Chapter 13 may be one way to stop foreclosure, giving homeowners a chance to come current with their mortgage arrearages. However, there are some caveats to be aware of. This post does not contain legal advice, and it cannot promise any specific foreclosure outcome in a Chapter 13 case. Homeowners in Florida facing foreclosure will want to consider all their options for saving their home, including a bankruptcy filing.