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Chapter 13 bankruptcy can help save a home

People in Florida who are struggling with serious debts may consider Chapter 13 bankruptcy as a way to obtain much-needed debt relief and protection from the loss of property. Chapter 13 bankruptcy allows people to create a debt repayment plan that stretches over three to five years, allowing people to pay off their debts and attain financial stability. This kind of bankruptcy can be an appropriate choice especially for people with mortgages who have too much income to qualify for Chapter 7 bankruptcy.

Filing for bankruptcy can be an important part of the process of saving one’s home. In one Georgia case, a person who had filed for Chapter 13 bankruptcy was able to redeem and reclaim real estate that had been sold in a tax sale through their bankruptcy repayment plan. A tax sale often transfers title but with a right of redemption, which means that the property owner can recover their real estate if they pay the tax sale debt over a specified period of time. While the period for a Chapter 13 repayment plan is a standard three to five years, the redemption period in the tax sale contract in this case was only one year.

The property owner, in Chapter 13 bankruptcy, proposed including the tax redemption amount in their repayment plan for full payment over the life of the plan. Despite objections from the company that bought the property subject to the original owner’s right of redemption that the amount would need to be paid in only one year, courts found that legal title to the property remained with the original owner and that the high bidder had a secured interest in the bankruptcy case.

When people are over their heads with debt despite making a high income, Chapter 13 bankruptcy may provide a way out and a path to return to financial stability and security. A bankruptcy lawyer may be able to work with debtors and assist them in making decisions regarding bankruptcy.

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