A Louisiana homeowner who is facing difficult financial circumstances may not be able to keep up with the mortgage payment each month. Even just one missed payment can lead to threats of foreclosure from the lender, which can place the homeowner under even more stress. While it may seem like there is no way out, certain bankruptcy options stop foreclosure and provide a way to deal with debt effectively.
There are two main types of consumer bankruptcy, Chapter 7 and Chapter 13. Chapter 7 is a popular option for those who have a significant amount of unsecured debt. Chapter 13 is a better choice for Louisiana consumers that want to keep their property, such as their home. It involves submitting a plan for reorganization of debts for approval by the court.
The court-approved bankruptcy plan includes monthly payments that suit the consumer’s ability to pay. The filer will follow the plan for a period of three to five years, and at the end, he or she will be free from certain debts. In the meantime, it is possible to stay in the home, which is understandably important to many.
Chapter 13 could the right option for a Louisiana consumer who is struggling with catching up on mortgage payments and facing threats of foreclosure, but still has an ongoing source of income. Bankruptcy is a serious financial choice, and it is prudent to discuss this option with an experienced attorney before moving forward. An assessment of the individual case can reveal the most prudent choice for the unique situation.