Individuals living in Arkansas may be curious about what a homeowner can do about their mortgage if they have filed for bankruptcy. If they cannot afford the payments, they do have the option to walk away from the home during bankruptcy proceedings under some circumstances.
One option is for an individual who is in a Chapter 13 bankruptcy and whose mortgage payments are not part of the court-approved repayment plan to simply stop making payments on the home loan. Eventually, the lender will likely enter the foreclosure process. The time this takes can vary depending upon whether or not the lender and borrower are attempting to modify the loan’s terms. Additionally, the length of time the foreclosure process takes can vary from state to state.
Another option would be for an individual to switch from a Chapter 13 bankruptcy to a Chapter 7, which would allow them to walk away from not only the home but also have many of their unsecured debts discharged in a short period of time. However, this may not be an option for everybody. Some individuals may make too much money to be eligible for Chapter 7 bankruptcy. In such a case, it may instead be possible to dismiss the bankruptcy case and deal directly with creditors.
Someone having trouble making mortgage payments has numerous options within their bankruptcy. They may wish to speak with a lawyer to determine which option best suits their individual situation. Legal counsel can explain the eligibility requirements for the two principal forms of consumer bankruptcy as part of the process.