There are plenty of advantages to filing for Chapter 13 bankruptcy compared to filing for Chapter 7 bankruptcy in New York. One of the biggest advantages is that Chapter 13 can help prevent the foreclosure of your home.
You have a couple of options outside of filing for Chapter 13 bankruptcy when your mortgage is headed for foreclosure, but most of them cannot be met by those affected. Those options include paying the remaining payments due on the mortgage or selling the property to pay off the mortgage.
If you cannot make either of the aforementioned options happen, then Chapter 13 bankruptcy is your best option. Chapter 7 bankruptcy does not prevent you from losing your home, as many of your assets will be liquidated to help repay your creditors for the debt you have accrued.
Once you file for Chapter 13 bankruptcy all efforts by creditors against you to recover debts must be stopped. This includes any efforts to foreclose on your home. Chapter 13 does not just provide a temporary solution to stop foreclosure, but it also helps you put together a repayment plan to make up for any missed mortgage payments to stop foreclosure permanently.
In order to file for Chapter 13 you must be in two positions. The first is that you must have enough income available to begin making mortgage payments again, including the first one due after filing for Chapter 13. The second is that you must be in the position to make monthly payments for your mortgage that would pay off the amount that is past-due. All of this must be done within five years of filing for Chapter 13 bankruptcy in New York.
Make note that past-due payments must be made when you file for Chapter 13 in order to avoid foreclosure of your home. Should you miss payments, it is possible that the foreclosure process could resume.
Learn more about Chapter 13 bankruptcy and how it can prevent the foreclosure of your home.