Homeowners in the Royal Oak area often pay a premium to live in a prestigious neighborhood with better schools when compared with those in nearby counties. It is common for families to dedicate a significant portion of their household budgets to mortgage payments and other housing-related expenses accordingly.
Unfortunately, it usually takes decades to pay off a home and only a few months to put someone’s ownership interest in a property at risk. Foreclosure is an un-ignorable threat for those who have missed mortgage payments recently. Although many professionals would prefer to catch up on their mortgage without requiring external support, that simply isn’t always a viable option.
When someone has missed multiple payments, has already received a foreclosure letter or has not been able to find an alternate source for the lost income that led to missed mortgage payments, they may need to look into numerous options to protect what they have invested thus far into their home. A Chapter 13 bankruptcy filed at the right time could be a very valuable tool for someone who is worried about foreclosure.
How Chapter 13 bankruptcy helps
There are multiple ways in which a Michigan homeowner concerned about foreclosure can benefit from filing for a Chapter 13 bankruptcy. The first is when they receive an automatic stay at the time of filing, as that stay can prevent creditors from initiating foreclosure or other collection activity.
As a Chapter 13 bankruptcy moves through the court, the homeowner will be in a position to negotiate with their lender. In many cases, borrowers behind on their payments can negotiate a modification that would allow them to stay in their homes. Although foreclosure does mean reclaiming the home, lenders would often prefer to avoid what is typically a very costly process.
Finally, Chapter 13 bankruptcy helps by streamlining someone’s budget. Especially after they complete their repayment plan and discharge their unsecured debts, the person who files will likely have an easier time keeping their budget balanced and paying their mortgage on time every month. Identifying Chapter 13 bankruptcy as a useful tool for those who are concerned about foreclosure can help homeowners protect their most valuable personal property.