Using a Chapter 13 bankruptcy filing specifically to stop foreclosure is a common strategy in today’s economic climate. An automatic stay is entered as soon as a Chapter 13 bankruptcy petition is filed which temporarily halts the foreclosure process regardless of how far someone is behind on payments.
The automatic stay’s purpose is to give the debtor breathing room to work out a Chapter 13 repayment plan. The plan usually pays back some debts, cancels others, and provides one reasonable monthly payment for all of a client’s bills.
If you have questions about how Chapter 13 bankruptcy works, do not hesitate to contact me.