Download our free bankruptcy forms or request a free bankruptcy review. Thanks for visiting!

Filing a chapter 13 bankruptcy can help you stop foreclosure proceedings and help you keep your home.

A ch 13 is a repayment plan, combining all of your debts and determining how much of your income you can pay each month in order to pay off all or a portion of your debts. If you are facing foreclosure and owe back mortgage payments you can include this debt in the bankruptcy filing.

The bankruptcy trustee will then determine your ability to make monthly payments and approve or disapprove your debt plan. If approved, you will make your mortgage payments, and your monthly bankruptcy payments will be used to payoff the past mortgage payments you owe plus your other debts. Of course in order for this plan to work, you do have to have enough income.

If you do not make enough money to have a chapter 13 payment plan accepted, you may be forced into a chapter 7. This doesn’t necessarily mean you will lose your home to foreclosure. In a chapter 7 you can reaffirm your mortgage debt, and since most of your other debts will likely be discharged, you will probably have more income available to go towards your mortgage.

There are currently bills in congress to allow bankruptcy trustees to change the terms of mortgages for those in the bankruptcy process in order to stop foreclosures and create more realistic mortgage payments. As of this writing, those bills have not been passed into law. You can also negotiate with your mortgage company to avoid foreclosure while filing bankruptcy.