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Helping good people through bad times

Chapter 13 bankruptcy and foreclosure

Tennessee homeowners face a lot of financial pressures. There are expenses related to owning a home in addition to those that everyone must deal with. In times of financial turmoil, people may worry about how to balance it all. There are even situations where it becomes impossible for people to meet all their financial obligations. It's at these times that people may need to turn to bankruptcy in order to get a fresh financial start.

Chapter 13 bankruptcy, in particular, provides people the opportunity to get out from crushing debt while stopping foreclosure on their home. Foreclosure occurs when a mortgage holder takes steps to take the home back from the homeowner because the mortgage has not been paid. This process can be frightening for homeowners that desperately want to remain in their homes.

When people file for a Chapter 13 bankruptcy, an automatic stay goes into effect. This halts all collection efforts against the debtor -- including foreclosure proceedings. This means that, by law, a foreclosure sale will be stopped.

This will give homeowners, in many situations, time to restructure their debts. By doing this, people will be able to eliminate many second or third mortgages by converting them to unsecured debt. A portion of this debt is then paid back over time.

The Chapter 13 bankruptcy repayment plan also allows debtors to restructure their arrears on their first mortgage. This means that people will be able to pay back their debt slowly while making their current payments. In some cases, this can help people stay in their home and stop foreclosure altogether.

A Chapter 13 bankruptcy is a good option for some people in Tennessee. However, it may not be right for everyone in every situation. Therefore, people may need to consult with an attorney to determine if Chapter 13 or other forms of debt relief will work for them.

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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