People have various reasons for wanting to file for bankruptcy. When you are faced with bills that have a higher payment than your income, you might consider taking this step. For some individuals, the point that pushes them to bankruptcy is foreclosure. They might be so focused on stopping the foreclosure that they take this step.
The first thing that you need to know is that bankruptcy won’t stop foreclosure forever, but it might buy you time to get caught up on the payments. This isn’t going to be a quick fix, and you will have to put in a good effort toward repaying your debt.
You will have to file a Chapter 13 and not a Chapter 7 if you want to be able to keep your home. This means that on top of the mortgage payments, you will also have a court mandated payment to cover the debts that are included in the case.
As part of the bankruptcy process, you will have to get the mortgage payments caught up. When you file for bankruptcy, there is an automatic stay put in place that forbids creditors from contacting you to collect debts. This halts the foreclosure; however, it doesn’t undo steps that have already been completed. This means that you will need to file sooner rather than later if you want to try to keep your home.
You also have to look at the long-term impacts of the filing. Determine whether you will be able to make the payments after the bankruptcy. You should only base your decision on what’s going on with you since you have to live with the impacts.