Chapter 13 bankruptcy can stop a foreclosure and give you up to five years to catch up on missed mortgage payments. You keep the house only if you make every plan payment and every new mortgage payment on time. Before you file, make sure your budget can carry both for the whole plan.
Finishing is the hard part. Of the consumer Chapter 13 cases federal courts closed in 2025, only 45% ended with a completed plan and a discharge, the court order that wipes out the eligible debt that’s left.
Your plan payment comes from your disposable income, what’s left after the living expenses the law allows. It has to catch up what you’re behind on and pay priority debts, such as recent income taxes and back child support, in full. Card issuers and other unsecured creditors can get less than they’re owed, but never less than a Chapter 7 sale of your unprotected property would have paid them.
A trustee collects that payment, pays your creditors, and keeps a fee of up to 10%. Plans last three to five years.
Chapter 13 fits homeowners behind on the mortgage, filers whose income is too high for Chapter 7, and anyone with property a Chapter 7 trustee could sell. You need regular income, credit counseling within 180 days before filing, and debts under the federal limits, which exceed $500,000 for unsecured debt and $1.5 million for secured debt.
If the mortgage charges no interest on missed payments, a homeowner $9,000 behind can spread that sum across a five-year plan at $150 a month, plus the trustee’s fee, on top of every regular mortgage payment. Fall behind on those regular payments and you can still lose the house. File before the foreclosure sale, too, since the right to catch up ends once the house is sold.
If plan payments stop, the court can convert the case to Chapter 7 or dismiss it, and a dismissal lets the lender restart the foreclosure. When your income falls mid-plan, ask your attorney about modifying the plan before you miss a payment. The bankruptcy drops off your credit report seven years after the filing date.
Bring a month-by-month budget with both payments in it to a bankruptcy attorney, who can tell you whether a plan you can afford to finish would also win the court’s approval.
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