CHAPTER 12
Chapter 12 is available to individuals with regular income and can be a crucial tool for those who are facing foreclosure or repossesion. This chapter prioritizes the debtor’s ability to keep their most important assets while restructuring their payments for the next three to five years.
Automatic Stay
Immediately after filing for relief under chapter 13, collection efforts must stop. This includes demands for payments, foreclosure proceedings, and continuing litigation.
Specific Debts
This filing can be attractive to individuals who are specifically facing foreclosure, repossession, or overwhelming tax debt or domestic support obligations. Foreclosure in particular is often a disaster where the owner’s equity disappears overnight, and once it’s gone, it’s almost impossible to get it back. Bankruptcy filing is often the only sure-fire way to prevent such a major disaster.