Chapter 13 Stops Garnishments & Lawsuits
Once your attorney files Chapter 13 Bankruptcy, the collection companies’ harassing phone calls stop immediately. Creditors can no longer contact you directly, and must work through your attorney, the trustee and the bankruptcy court.
If you were already being garnished, those garnishments will stop. And, creditors cannot bring new garnishments or lawsuits against you, while your Chapter 13 Bankruptcy plan is in effect.
Chapter 13 Bankruptcy Stops Foreclosure
Chapter 13 Bankruptcy can allow you save your homes from foreclosure – even if you have “equity” in the home. As soon as your attorney files Chapter 13 Bankruptcy, foreclosure proceedings are stopped – and you will be given the opportunity to set up a Payment Plan that enables you to “catch up” delinquent mortgage payments over time.
Typically, your Chapter 13 Repayment Plan will result in a lower mortgage payment. Chapter 13 Bankruptcy also allows you to reschedule payments of other secured debts (such as second mortgages, etc.) – and lets you extend these payments over time, too.