The home foreclosure process can be confusing and overwhelming, especially for families already stressed about their financial futures. When those financial problems have spun out of control or seem to have no end, Florida families may consider bankruptcy as a means of regaining stability. The bankruptcy process can also play an important role in the home foreclosure process and how the foreclosure will be handled.
Exactly how a bankruptcy filing affects a home foreclosure depends on the type of bankruptcy filed. Chapter 7 is the most common type of bankruptcy and will halt home foreclosure action. However, it may not permanently stop the home foreclosure process. One benefit for those filing Chapter 7 bankruptcy is that debt, such as credit card debt, can be discharged and this alone can free up enough money so families can get caught up on back due mortgage payments.
Chapter 13 bankruptcy is also a popular option for families who wish to keep their homes. It is essentially a repayment plan that is approved by the courts. That repayment period can be from three to five years, including the repayment of mortgage debt. This can give families much-needed time to catch up and stabilize their situations for the long-term.
The type of bankruptcy that is best for a Florida family facing home foreclosure will greatly depend on the individual situation and the long-term financial outlook. Knowing the different aspects of each type and how each will directly affect a home foreclosure already in the works or one that may be pending is vital to deciding the best course of action. Our firm has more information about bankruptcy in general and how it will specifically affect any home foreclosure in Florida.