Sometimes unforeseen circumstances cause havoc in your life. A change in financial conditions affects your business, health issues arise that require costly procedures, the loss of a job, etc. Many times the appearance of insurmountable debt paralyzes your ability to move forward. Not all of your assets are susceptible to creditor attachment and can be protected. Bankruptcy can alleviate the sense of having to constantly look over your shoulder for the next bomb to drop. The bankruptcy laws were established to provide an individual with a fresh start in life. The discharge of this debt will enable you to re-establish your credit and again pursue life without the constant worries of the past.
A Chapter 13 can provide you an opportuinity to save your house. If you fell into foreclosure because of a change in financial position, such as loss of a job, and now circusmstances have changed for the better, the courts will provide you a means of paying back all the missed mortgage payments (arrearage) in a plan over 60 months. You will need to stay current from the filing with the mortgage payments as they become due and will pay the arrearage amortized over the plan period.
If you have several mortgages against your property and the property is not worth the total debt, you may be able to strip the liens of mortgages not supported by any equity in the property. This requires that a second mortgage have absolutely no equity remaining after the first to support its lien. If $1.00 remains, then the lien stripping will not occur. After a successful lien stripping the 2nd or 3rd mortgages are removed from the property and the debt becomes unsecured and can be discharged when the Chapter 13 Plan payments are completed.
Under certain circumstances, even unpaid income taxes can be discharged through bankruptcy.
