When you file for Chapter 13 bankruptcy, you do not lose any property to the bankruptcy trustee nor does the bankruptcy filing affect your mortgage.

However, although you won’t lose your home through the Chapter 13 bankruptcy process, you can still lose your home through foreclosure. If you want to keep your home then you must continue to make your mortgage payments during Chapter 13 bankruptcy.

If you are facing foreclosure, Chapter 13 allows you to make up mortgage arrears through your plan (something you cannot do in Chapter 7 bankruptcy).

Mortgage Arrears

If you want to keep your home, you’ll have to pay back all of your mortgage arrears by the end of the repayment period. This gives you three to five years to make up the arrears. This feature of Chapter 13 is one reason why many people facing foreclosure choose Chapter 13 over Chapter 7 bankruptcy.

Chapter 13 and Foreclosure

If you are in foreclosure when you file for Chapter 13 bankruptcy, bankruptcy’s automatic stay stops the foreclosure. If you stay current on your mortgage payments, and make up the arrears through your Chapter 13 plan, the lender cannot foreclose.

For more information regarding Chapter 13, and to find out if it is the best option for you, give us a call to schedule a FREE consultation at 731-424-3315.




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