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Bankruptcy may help you to save your home

The fear of losing your home when you're unable to pay the mortgage is a tough one. Most people want to keep up with this payment, but circumstances sometimes don't allow this. It's imperative that you consider your options when you're in this position, especially if you want to save your home and stop the foreclosure.

One of the options that you have is to file bankruptcy, which can help to regain control of your finances. For some individuals, a Chapter 13 bankruptcy provides them with a measure of relief while giving them time to catch up on their mortgage payments.

In a Chapter 13 bankruptcy, the court consolidates your debts and you pay a regularly-occurring amount to the bankruptcy trustee who distributes that money to creditors in accordance with the order that's required by law. If you want to keep your home, you need to come up with a payment plan that enables you to get current on the mortgage.

Remember, you have to pay the monthly mortgage payment plus the amount you're putting toward the past due balance. You also have to keep up with other monthly bills and the payment to the bankruptcy trustee.

In the short term, a bankruptcy will put a halt to collection attempts on debts you have. The court issues an automatic stay, which does stop the foreclosure proceedings. This is only a temporary measure, but it may buy you time to get back on track or to work out something with the lender.

Financial decisions of this magnitude must be considered carefully. Be sure that you consider all your options and find out exactly how they will impact you. Working with someone familiar with the bankruptcy process and foreclosures can benefit you greatly.

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