Can Chapter 13 Bankruptcy Save Your Home From Foreclosure?

Will Filing Chpater 13 Bankruptcy Protect Your Home?

Yes and no. The answer depends on your situation. Chapter 13 can perform surgery on your finances so that you can save your home from foreclosure. Chapter 13 can even eliminate a second mortgage and reduce the amount owed on a car for some people. However, the biggest factor is whether, after eliminating some debts and reducing others, you will have enough monthly income to pay: 1) your past-due mortgage payments over 60 months; 2) your current mortgage payments, and; 3) your living expenses. To learn more about the Chapter 13 process, click here. To find out if you qualify for Chapter 13, click here.


What Can Chapter 13 Do To Help Save You From Foreclosure?

  1. Chapter 13 bankruptcy will stop the foreclosure process immediately.
  2. Chapter 13 bankruptcy will eliminate your other debts so that you will have more cash to pay your house payment.
  3. Chapter 13 bankruptcy will give you up to 60 months to repay your unpaid mortgage payments.
  4. Chapter 13 bankruptcy can eliminate some second mortgages.
  5. Chapter 13 bankruptcy can also reduce the amount owed on some cars down to market value.
  6. Chapter 13 bankruptcy will stop lawsuits, garnishments, repossessions, judgments, liens, and bank levies.

How Does Chapter 13 Work?

Chapter 13 is called the reorganization bankruptcy because it allows the debtor to reorganize their finances and get rid of those debts that are unwanted, such as credit card debts, medical bills, personal loans, and old taxes. This allows the debtor to focus on paying, and keeping, those assets that the debtor wants to keep such as a home and cars.

During the Chapter 13 process, the debtor chooses which debts to repay. If the debtor's payments are behind in these debts, Chapter 13 allows the debtor to repay the past-due amounts over 36-60 months. Also, during that time, the debtor is keeping up with the current payments on those debts. At the end of the chapter 13 period, all loans that were kept are current. Also, all other debts have been eliminated. The debtor has been able to reorganize the family's finances to fit their ability to pay.

The concept behind Chapter 13 is simple: 1) eliminate as much debt as possible, including lawsuits, judgments, and garnishments; 2) eliminate the second mortgage if possible; 3) reduce the amount owed on all car loans if possible; 4) pay the past-due amounts owed on secured debts that are kept; 5) pay the current payments every month; 6) depending on how much money is left over after paying the mortgage, past-due mortgage, cars, and all other living expenses, pay the trustee a small portion toward the debts that were eliminated. Do this for 36-60 months and the debtor has saved the home, eliminated a lot of debt, and now has a monthly budget that is affordable.

If You Have More Questions


Please contact us if you have more questions or are ready to move forward and start the process of becoming debt-free. Remember, we are here to help you resolve your debt problems, so call us now!

(949) 954-7568