Falling behind on your mortgage is one of the most frightening financial experiences a family can face. When the missed payments pile up and the bank schedules a sheriff's sale, it can feel like there is no way out. But there is: Chapter 13 bankruptcy is one of the most powerful tools available for saving a home from foreclosure — and it is designed for exactly this situation.
What "Mortgage Arrears" Means
Mortgage arrears are the total of the payments you have missed, plus any late fees, costs, and charges the lender has added. If you are six months behind on a $1,500 monthly mortgage, your arrears might be $9,000 or more. The lender wants that entire amount brought current — usually all at once — and that lump-sum demand is what pushes families toward foreclosure.
Step 1: The Automatic Stay Stops Foreclosure
The moment you file Chapter 13, the automatic stay takes effect. This federal court order immediately halts the foreclosure process and stops a scheduled sheriff's sale in its tracks. Even if the sale is set for the next morning, a properly filed petition stops it. This breathing room is what makes everything else possible.
Step 2: Cure the Arrears Over Time
Here is the heart of how Chapter 13 saves homes: instead of demanding the entire past-due balance at once, the law allows you to cure the arrears over the life of your plan — typically three to five years. Your $9,000 in arrears, spread over 60 months, becomes a manageable addition to your monthly plan payment rather than an impossible lump sum.
Step 3: Keep Making Your Regular Payments
While you are catching up on the arrears through the plan, you resume making your ongoing monthly mortgage payments — either directly to the lender or through the trustee, depending on the district's practice. By the time your plan is complete, the arrears are paid in full and you are completely current on your mortgage.
What About Second Mortgages?
Chapter 13 offers an additional, powerful tool: if your home is worth less than what you owe on your first mortgage, a wholly unsecured second mortgage may be "stripped off" — treated as unsecured debt and discharged at the end of the plan. In the right circumstances, this eliminates an entire mortgage and can save tens of thousands of dollars.
I have filed Chapter 13 cases on the morning of a sheriff's sale and stopped it cold. If you are behind on your mortgage but want to keep your home, do not wait — the sooner we file, the more options you have.
The Bottom Line
If you have fallen behind on your mortgage, Chapter 13 can stop foreclosure immediately and give you three to five years to catch up on the arrears at a pace you can afford — all while you stay in your home. Timing is critical: the automatic stay only protects you once the case is filed. If a sheriff's sale is scheduled or foreclosure has begun, contact an experienced bankruptcy attorney right away.