Here is how Chapter 13 works.
Chapter 13 is a little different. When someone files Chapter 13, they don't take all their assets and sell them. Instead they take all the monthly payments and discount them for penny's on the dollar. It's like a debt consolidation plan. Whatever amount is agreed upon has to be paid to the bankruptcy court every month for the next 3-5 years. So the homeowners get to keep their house, their cars, and all their assets. Now, as long as the homeowner stays current with the mortgage payments and pays the amount agreed upon, they will be fine. However, If any payments are missed, the trustee will dismiss the bankruptcy and the foreclosure process will begin again..
(Note: Bankruptcy should be the last alternative or option and should not be used to stop foreclosure unless you have no other option, or else you need the protection of a bankruptcy due to other circumstances or situations you are currently up against. Please contact us today to discuss your legal options through a FREE consultation with an associate at our firm.