SAVANNAH, Ga. (WSAV) – As more people found themselves out of work over the last year, the need to put-off debt became crucial. For many homeowners that meant signing up for mortgage forbearance.

Local bankruptcy attorney Mark Bandy says the fine print on most private forbearance agreements says borrowers have to pay back the lump sum of the payments they deferred once the forbearance period is over. Unless lenders agree to push the payments to the end of the mortgage term, Bandy says some people are going to find themselves in a position to file for bankruptcy. “Bankruptcy has always been driven by medical expenses, loss of a job, or, in the family context, divorce. Well, we’ve effectively been through a gigantic medical event as a nation,” he told News 3 during a Zoom interview.

Bandy says there are two kinds of bankruptcy, Chapter 7 and Chapter 13. Under Chapter 7 your debt is written off, but the process takes about 6 months, and is best suited for people with massive credit card debt. Chapter 13 allows those who are delinquent on a mortgage to setup a structured repayment plan and keep their house. Bandy says “The type of debt that you have does factor into which chapter of bankruptcy is going to be the better option for you.”

And while bankruptcy isn’t great for your credit, Bandy says it’s not as bad as you may think. “Many of my clients are able to purchase automobiles within a year of filing bankruptcy, and even purchase homes within 2 or 3 years.”