If you are behind on your house payments like many Louisianians, you may be taking advantage of current mortgage protections. Unfortunately, loan forbearance only means putting off the inevitable; eventually, you will have to begin payments again, including any delinquent amounts.
Added to other types of debt you may owe, restarting monthly payments may be unrealistic, putting you at high risk of foreclosure. Instead of falling further behind, filing for Chapter 13 bankruptcy may help you avoid losing your home while building a fresh financial foundation.
How Chapter 13 may help
Chapter 13 gives you an opportunity to gain immediate relief from creditors while reorganizing your debt so that your monthly payments are affordable rather than overwhelming. You may also be able to minimize or eliminate much of your unsecured debt.
Under Chapter 13, you may be able to keep your home and vehicle if you can continue making payments. Typically, any past due amount figures into your bankruptcy repayment plan.
Chapter 13 and bankruptcy myths
If you are like many Americans, you may assume bankruptcy is the beginning of the end. In addition to feelings of shame or failure, you may worry that filing will mean no chance of rebuilding your credit or obtaining future loans. For these reasons and others, only a fraction of U.S. households who could benefit from bankruptcy choose to file.
It is true that bankruptcy will impact your credit score initially. However, you are more likely to be able to rebuild it again by getting your finances back on track rather than by continuing to fall further into debt. Additionally, you may be eligible for a new home loan within a few years of filing.