Different Bankruptcy Chapters Offer Different Protections When Facing Foreclosure

I spent most of last week discussing news about foreclosures, but this week I would like to focus on the differences between Chapter 7 and Chapter 13 bankruptcy specifically for the people who are considering filing because of a foreclosure. While both chapters can offer certain forms of foreclosure help, it is important for all potential filers to choose the option that will best coincide with their long-term goals.

Generally speaking, when it comes to foreclosure, clients wanting to save their homes file for Chapter 13 while clients who want to give up their houses or simply cannot afford to save them file for Chapter 7. Again, a qualified Washington DC or Maryland bankruptcy lawyer may help you secure an automatic stay through either Chapter 7 or Chapter 13, but how long that stay allows you to remain in your home will depend on how far behind you are on mortgage payments and your ability to continue making monthly payments. Chapter 13 will help you come current, while Chapter 7 simply buys you time.

While many clients have credit card debt or medical bills that they have been dealing with for years, it is often the threat of their homes being foreclosed on that finally brings them to my office. If you are in a similar situation and are considering bankruptcy, it is good to have an understanding about whether Chapter 7 or Chapter 13 is the better option for your own situation. I will outline some of the benefits of each chapter during the remainder of the week and hope that information can help you decide which one would work best for you and your family.

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