Kevin J. Pratt Trial Lawyer

Saving the home is a common reason for Chapter 13 bankruptcy

People file for bankruptcy for a lot of different reasons, including credit card debt, unexpected medical bills, failed business ventures and more. One of the most common reasons for Chapter 13 bankruptcy, though, is because people are trying to stop foreclosure and save their homes.

Chapter 13 can help if your home is being foreclosed on in a few ways. First off, it's generally going to put an automatic stay on the foreclosure lawsuit being carried out by the lender. That suit has to wait for the bankruptcy lawsuit to conclude. It can take months for that to happen, so, at the very least, you get a few more months in your house while everything goes through the court.

With Chapter 13, the goal is to reorganize your debt into a repayment plan. This can spread that debt out, making everything more affordable, meaning you can make your mortgage payments once again. This can save your home long-term.

It's a great option for people who are still employed but who simply are in over their heads in debt. Maybe you can't afford to pay everything that you owe tomorrow, but you do have a bi-weekly paycheck and you could afford to pay a portion of that every month, for the next three to five years, until it's taken care of. That way, you can also pay your mortgage lender and keep food on the table while the debt you have becomes manageable.

If you got a foreclosure notice in the mail, don't just assume your home is lost. As you can see, there are legal options, and it pays to know how to use them.

Source:, "14 key factors when considering bankruptcy," Dana Dratch, accessed Oct. 07, 2016

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