The Repayment Plan within the Chapter 13 Bankruptcy

Chapter 13 bankruptcy can often provide the greatest chance to save a home that is in foreclosure. In addition to the proposed plan to repay mortgage arrears and other creditors, there is often a secondary payment plan once the case is confirmed. The circumstance I am referring to is a default order providing for repayment of past due obligations through the Chapter 13.

Take the case of a homeowner who is repaying mortgage arrears through a Chapter 13 plan. If the homeowner falls behind on either post-petition mortgage payments or payments to the Chapter 13 trustee, the homeowner and the creditor can work out an additional repayment plan to catch-up. This is documented in a default order which provides the framework for a homeowner to catch-up. There is often a notice of default and right to cure period which is usually 14 days.

Thus, even in the Chapter 13, there often exists a secondary repayment plan in an effort to keep the homeowner in the home. This is just another excellent benefit of Chapter13 when it comes to saving a home.