When financial burdens are overwhelming, the threat of foreclosure can be particularly stressful. But once you file for Chapter 13 bankruptcy, an automatic stay is issued, temporarily stopping any foreclosure action against you. Below are a few things to keep in mind if you’re considering this step.

What You Need to Know About Chapter 13 

Chapter 13 Buys You Precious Time

The automatic stay issued when you file for bankruptcy permits you valuable time to explore your options. The stay, however, is not permanent, and decisions will have to be made. Is it in your best interest to sell your property and put the money toward your outstanding debt? Or is it more realistic to catch up on what you owe toward your mortgage and retain your home? Your bankruptcy attorney will help you examine both of these possibilities.

Chapter 13 Offers Protection Against Foreclosure Action

With Chapter 13 bankruptcy, your existing debts are restructured into a payment plan that is more feasible for your financial situation. Every Chapter 13 plan is different, customized to the unique needs of the person filing. But if you're facing foreclosure, what you owe on your mortgage can be figured into your repayment plan. As long as you can pay your monthly plan installments as well as your regular monthly mortgage obligations, you will likely hang onto your house. The temporary stay becomes a permanent one.

Chapter 13 Payment Plans Typically Last 3 to 5 Years

If you're afraid your repayment plan under Chapter 13 bankruptcy will be more than you can afford, there are two things to bear in mind. First, the plan is not meant to be an impossible hardship; it is designed with your needs and income in mind. And second, a typical plan is repaid over the course of three to five years, giving homeowners ample time to catch up on their mortgages and stay in their homes.

If you live in the Honolulu, HI, area and are considering Chapter 13 bankruptcy, trust Greg Dunn, Bankruptcy Attorney. Call (808) 524-4529, visit his office online or connect with them via Facebook or Google+ to schedule a consultation. With Chapter 13, it is entirely possible to achieve your dream of debt relief while staying in the home you love.