Owning a home can be a great financial investment, but it can also feel like a heavy burden when things are not going well. When people in the state of Pennsylvania are struggling financially, they often assume that filing for bankruptcy will mean the loss of their home. However, conversely, filing for bankruptcy in the state of Pennsylvania can actually mean that you can prevent foreclosure on your home.
If you are struggling to repay your mortgage or are suffering from overwhelming debts, it is a good idea to look into the ways that bankruptcy might be able to help your financial situation.
Bankruptcy can buy you more time
If you are facing foreclosure, it essentially means that you are subject to attempts from creditors to collect on the debts you owe. When you file for bankruptcy, an automatic stay will come into effect. This will mean that creditors will no longer be able to take action in seizing your property, buying you time to create an alternative repayment plan.
Using Chapter 7 to avoid foreclosure
By filing for Chapter 7 bankruptcy, your debt secured by the home will be canceled. However, you may still lose your home, because you will likely need to use it as an asset in order to satisfy creditors.
Using Chapter 13 to avoid foreclosure
Chapter 13 bankruptcy helps you to create a repayment strategy that satisfies your creditors and makes your cash flow more efficient. Therefore, it is possible to avoid unsecured debt and get back on track.
If you want to learn more about how bankruptcy can prevent foreclosure, an experienced bankruptcy attorney can provide much-needed advice and guidance. For a free consultation with a Quinn Law Firm bankruptcy attorney, please contact us at 814-833-2222.