The thought of losing the family home can bring stress and anxiety on just about anyone. Knowing the proper way to deal with excessive debt can help a person solve their problem most efficiently. In many cases, if the family has enough income to afford to pay for the house, but their other bills or an unexpected financial event resulted in them getting seriously behind on payments, it is possible to avoid foreclosure. The answer to their problems just might be filing for bankruptcy.
When many people think of bankruptcy, the first thing that comes to mind is giving up everything and starting over. However, most bankruptcy filings in Lawerence, KS, are Chapter 13, which allows people who are in danger of losing their home to catch up on missed payments over time. There are conditions that the family must meet to avoid foreclosure, but anyone who wants to keep their home after missing two or more payments should schedule a consultation with an attorney such as Joe Wittman in Lawrence, KS, to learn about their options.
Chapter 13 in Lawrence, KS, works very different than Chapter 7 bankruptcy. Instead of erasing all unsecured debts like credit cards and medical expenses, this type of debt relief requires people to make regular monthly payments over three to five years. These payments are based on the family’s resources, so they will be affordable. However, after making the payment, there won’t be much money left over in the budget. Families in bankruptcy have to learn how to save money by reducing their entertainment expenses and eating more meals at home.
Secured debts, like mortgage loans and car financing, must be paid according to the agreement during bankruptcy in order to keep the property. Borrowers who default on their bankruptcy payment plan may be subject to foreclosure or repossession. Families don’t have to live within a strict budget forever and those who are able to do so throughout a Chapter 13 bankruptcy acquire budgeting skills that will help them keep their finances under control after their case is discharged.
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