Chapter 13 Bankruptcy Can Save Your Home from Foreclosure

A chapter 13 bankruptcy is typically a repayment plan; however, a chapter 13 bankruptcy offers many options that a chapter 7 bankruptcy does not. One of those options is saving a home from foreclosure.

In a chapter 7 bankruptcy, the borrower must be current on his or her mortgage payments in order to keep his or her home. In a chapter 13 bankruptcy, the borrower does not have to be current, and has a choice as to how to make the past due payments.

In the chapter 13 bankruptcy, the borrower may either pay the arrearages on the mortgage through the repayment plan, or mediate and attempt to modify the mortgage entirely. Another benefit of filing bankruptcy is the ability to remove the lien of a second mortgage or other loan secured by the home, in certain circumstances.

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