Bankruptcy Resources

4 minutes read

How to Stop Foreclosure With Chapter 13 Bankruptcy

If you’re facing foreclosure, Chapter 13 bankruptcy may help—and talking to a Maryland bankruptcy attorney can be a good start on the path to financial freedom.

How to Stop Foreclosure With Chapter 13 Bankruptcy

When you file for Chapter 13 bankruptcy (also known as a wage earner’s plan), you don’t have to lose any of your property to the process. Chapter 13 allows you to make up mortgage arrears—payments you didn’t make when they were due, and now they’re past due—as part of your repayment plan, and that means this type of debt relief can stop foreclosure.

What Happens During Foreclosure?

The term foreclosure refers to the process of a lender repossessing a home because the borrower didn’t make his or her mortgage payments.

If your home is being foreclosed, it means the lender wants it back. The lender will re-sell the property to try to recoup its losses.

Do You Have to Stay Current on Mortgage Payments During Chapter 13 Bankruptcy?

Although you can structure your Chapter 13 repayment plan to make up for mortgage payments you missed in the past, you still have to stay current on your mortgage payments while you’re repaying your lender for the arrears.

Depending on what the judge rules, you may pay your lender directly, just like you always have, after you file for Chapter 13 bankruptcy. However, the judge could rule that you make your mortgage payments to the trustee instead of your lender. Every case is different, which is why it’s a good idea to talk to an experienced bankruptcy lawyer to find out what possible outcomes you’re facing.

Making Up Mortgage Arrears

If you file for Chapter 13 debt relief, you’ll have to pay back all of your mortgage arrears by the end of your repayment period. The discharge process can take between 3 and 5 years to complete, and your attorney will factor your timeframe into your repayment plan.

Does the Automatic Stay Immediately Stop Foreclosure?

When you file for bankruptcy in the state of Maryland, the courts immediately issue an automatic stay. The automatic stay prevents your creditors from contacting you about your debts and stops them from attempting to collect on those debts—and that means it stops foreclosure in its tracks.

As long as you stay current on your mortgage payments, your lender can’t foreclose on your home.

What if You Have a Second (or Third) Mortgage on Your Home During Chapter 13?

If you have a second or third mortgage on your home, or if you have taken out a home equity line of credit (commonly called a HELOC), you may be able to strip one or more of these loans through a Chapter 13 bankruptcy. This is possible if one (or more) of the loans is unsecured because it’s no longer secured by your home’s equity.

Typically, you’ll pay off your unsecured debt as part of your repayment plan. At the end of the repayment plan, your remaining balances on stripped off mortgages can be discharged by the court.

Do You Need to Talk to a Lawyer About Debt Relief?

If you’re thinking about filing for Chapter 13 bankruptcy, it makes sense to talk to an attorney as soon as possible. Filing for this type of bankruptcy can stop foreclosure and allow you to keep your home, so the sooner you call us at 301-933-2595 for a free bankruptcy consultation, the sooner we can help you.

Recent Posts


We are here to help

Law Group LLC

5882 Hubbard Dr,
Rockville, MD 20852
9:00am – 5:00pm