By LJ Adama

Every 13 seconds another home enters foreclosure, according to the Center for Responsible Lending.

If you’re being threatened with foreclosure, you’re probably trying everything you can to save your home. But if you’ve fallen too far behind on payments and having difficulty catching up, Chapter 13 bankruptcy may be able to give you the relief you’re looking for.

Chapter 13 was designed to stop foreclosure and repossession.

Chapter 13 Bankruptcy and Foreclosure

The personal bankruptcy option of Chapter 13 offers some debtors a chance to catch up on those late mortgage payments through the Chapter 13 repayment plan. Under Chapter 13, the filer is placed on a repayment plan that’s agreed upon by the court, the creditors and him or herself and/or the bankruptcy lawyer. One the terms are approved, the filer then makes one lower monthly payment on past due and current debts.

The Benefits of Chapter 13 Bankruptcy

In exchange, the filer is permitted to keep the property he or she is repaying on, such as a house or car. This repayment plan typically lasts between three and five years. During this period, the filer has no direct contact with creditors, which means the harassing calls stop and the collection letters stop piling up in your mailbox.

In addition, if all payments are made according to schedule by the end of the Chapter 13 repayment plan, the bankruptcy court has the option of discharging (eliminating) the rest of the filer unsecured debts.

Unsecured debts are considered debts not tied to property (as opposed to secured debts like a home or car note) and can include:

•  credit card debt
•  medical bills
•  payday loans
•  utility bills
•  some personal loans
•  parking tickets

Who Can File Chapter 13 Bankruptcy?

There is no official “test” to determine whether a person is qualified to file Chapter 13; however, since the Chapter 13 plan involves monthly payments, filers usually need a steady income in order to be able to keep current with payments.

If you’re struggling with debt but don’t have a steady income and rent or have little equity in your home, Chapter 7 bankruptcy may be a better personal bankruptcy option.

Chapter 7 involves the discharge of unsecured debt, but it can also involve the liquidation (sale) of a debtor’s significant property in order to repay creditors.

For this reason, Chapter 13 is likely to be a better option for people who are filing bankruptcy and want to keep their home.

Bankruptcy Questions?

It’s important to know that everyone’s situation is unique and filing bankruptcy isn’t right for everyone. A bankruptcy lawyer can be a good person to talk to about whether bankruptcy may be able to help you get out of debt and/or keep your hard-earned property.

LJ Adama writes articles on financial advice and bankruptcy help. To get a better understanding for   filing bankruptcy and to learn about chapter 7 as well as chapter 13 please visit http://www.bankruptcychapter7and13.com/

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