Chapter 13 Can Help You Keep Your Home

Video Transcription

Filing for bankruptcy under Chapter 13 can help you save your home. In a common situation, people will have arrears on their mortgage, meaning there are several months for which they haven’t paid their mortgage. If you have enough income to, Number 1, start paying your mortgage again, and 2, pay something extra to cure the arrears, you can have 5 years to cure the arrears under Chapter 13.

Another reason you might want to file under Chapter 13 is you might be ableto get rid of a second mortgage. The way this works is if your first mortgage is more than the value of your house, you can get rid of your second mortgage. As an example, let’s say your house is worth $400,000. If your house is worth $400,000 and the balance on the first mortgage is $425,000, then your second mortgage, no matter how much it is, can be
eliminated entirely and you will never have to pay that mortgage. It will disappear as a lien on your house.

A third way that Chapter 13 can help you is if you file and are paying your arrears. Sometimes, you can get a modification of your mortgage even though you’re filing a Chapter 13. We have often had clients who filed their Chapter 13 and were able to modify their mortgage during the case. Of course, we then have to get the court’s approval to finish the modification, but the court will always approve of modification. The bottom
line is if you are in danger of losing your home and your income is such that you could pay your mortgage and something on the arrears, Chapter 13 can help you keep your home.

About Allan Bloomfield

For over 30 years, my focus in practicing law has been to help people overcome what seems to them to be insurmountable financial difficulties. I have helped thousands of people file both Chapter 7 and Chapter 13 cases, and in most cases, they are able to keep all of their assets, including homes, cars, their retirement accounts and personal property.