Louisiana homeowners may fall on hard financial times, and it may become difficult to keep up with house payments each month. After even one missed or late payment, the lender may reach out to the homeowner or there may be a penalty. After a few missed payments, the homeowner may receive notice that the foreclosure process has started. At this point, it means there is a risk of losing the family home.
It’s scary and overwhelming to face the possibility of losing the home. A homeowner who has no hope of catching up on these payments may want to consider bankruptcy as a way to stop the foreclosure process. Upon filing, the automatic stay will go into effect, which halts all collections efforts. This allows the applicant to meet the terms of the bankruptcy plan without constant phone calls of the fear of losing property.
Chapter 13 bankruptcy is a prudent option for those facing the specific threat of foreclosure. This process reorganizes debts into manageable payments, and the applicant will follow the repayment plan over a period of three to five years. By the end of the bankruptcy process, some remaining balances could be discharged.
Making the choice to file for bankruptcy is not easy. Louisiana homeowners who may lose the family home might find it helpful to speak with an attorney regarding how this process may be beneficial. The right way forward depends on individual factors such as the types of debts a person has, income levels and more. Bankruptcy could be a reasonable way to regain financial stability for the future.