The subprime mortgage crisis of the 21st Century has resulted in a larger-than-normal number of foreclosures. Across America, people lose their homes because they cannot afford their mortgages. Many of these people simply do not know that filing for Chapter 13 bankruptcy can be a powerful tool to save their homes. Chapter 13 bankruptcy is very different than Chapter 7 bankruptcy. In Chapter 7 bankruptcy, all debts are discharged, but non-exempt property is sold to creditors. On the other hand, when someone files for Chapter 13 bankruptcy, an automatic stay goes into effect. Homeowners at risk for foreclosure have a multitude of different options available to them in order to protect their homes.
Automatic Stays
Automatic stays temporarily stop foreclosure and all other collections. This is done so that the debtor and the debtor’s attorney have enough time to establish a payment plan for all debts owed. An automatic stay is effective in warding off creditors and collectors and buying time for people who need time to make payments. When homeowners receive automatic stays, they may then restructure their payment plans in the long term so they are manageable. When a homeowner reliably pays the debts that the homeowner owns, the risk of foreclosure is minimized. Usually, if a debtor is employed, makes a sufficient income and does not owe debts over the Chapter 13 cap, the debtor can file for Chapter 13 bankruptcy. With the current economic crises, automatic stays are becoming ever more popular. People who have lost their jobs recently can also apply for automatic stays, as long as they can acquire new employment within a reasonable amount of time.
Chapter 13 Bankruptcy
Maryland or Washington D.C. residents who are at risk of foreclosure need to contact a qualified Maryland foreclosure attorney or a Washington D.C. Chapter 13 attorney. Since Chapter 13 bankruptcy status comprises a complicated web of legalese, only an attorney experienced with the details of Chapter 13 can successfully file for Chapter 13 bankruptcy. A Maryland foreclosure lawyer will fully investigate each client’s case and advise each client on the best way to protect the client’s assets. Bankruptcy law can be very complicated, so it is important to work with an expert when dealing with a bankruptcy. Homeowners at risk for foreclosure then do not lose their homes but must be smart and hire experienced bankruptcy attorneys to protect them.
