Legal Solutions for You,
Your Family & Your Business

Using Chapter 13 to Keep Your House

If you can stick to your Chapter 13 repayment plan, you can:

• repay missed mortgage payments (your mortgage arrears) over the life of the repayment plan, three to five years
• pay a fraction (or sometimes, nothing) of your unsecured debts during the plan period and probably eliminate these other debts entirely when you complete your plan, freeing up money for you to pay towards your mortgage
• ask the court to reduce (“cram down”) certain secured debts to the value of the collateral (for instance, reduce your $20,000 car note to the actual value of the car, say $12,000, reducing your monthly payments)
• contest the legality of the proposed foreclosure in the bankruptcy court, if need be
• contest any claims for costs and fees that are added to the missed payments you’ll repay as part of your plan (these costs are commonly made erroneously), and
• get rid of (strip off) liens on your home created by second and third mortgages, as long as they are wholly unsecured by your home (that is, if your home is sold and the proceeds are insufficient to pay back any portion of the lien).