Chapter 7 buys you the crucial time you need in many situations when falling behind in your obligations related to your vehicle or your home.
In the last several weeks of blog posts we’ve given many examples of how bankruptcy can buy you time for your vehicle and for your home. Here’s a summary how a Chapter 7 “straight bankruptcy” can do so.
1. Chapter 7 Buys Time for Your Vehicle
- Stops your vehicle from being repossessed, at least temporarily
- Gives you a some limited amount of time to catch up if you’re behind on payments
- Gives a very limited time to reinstate required vehicle insurance
- Gains you some time to get another vehicle before surrendering your present one
- Buys time to gather funds to redeem your vehicle for less than you owe on it
- Buys time to enter into a redemption loan to lower your debt on the vehicle
2. Chapter 7 Buys Time for Your Home
- Stops your immediate home foreclosure sale, at least temporarily
- Gives you limited time to catch up on your mortgage through a lump sum payment or in monthly “forbearance” payments
- A delay in foreclosure usually gives you a few more months to sell your home
- This delay can give you time to surrender your home while saving up for moving expenses
- Stops a lawsuit from turning into a judgment lien, creating a debt that can’t be discharged written off in bankruptcy
- Stops an income tax lien recording on your home’s title, potentially turning that tax into one that can’t be written off