Last Updated: February 2026

For many homeowners facing serious financial hardship, Chapter 13 bankruptcy can be a powerful legal tool. It offers a structured way to repay debt over time while protecting important assets—especially your home.

Unlike Chapter 7 bankruptcy, which can involve liquidation of certain assets, Chapter 13 bankruptcy is designed around a repayment plan. This makes it one of the most effective options for people who want to avoid foreclosure and get back on stable financial footing.

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is often called a “wage earner’s plan.” It allows individuals with regular income to create a court-approved repayment plan that lasts three to five years.

This process is especially helpful for people who:

  • Want to keep their home or vehicle

  • Have fallen behind on mortgage payments

  • Earn too much income to qualify for Chapter 7 bankruptcy

  • Need time to catch up on debts without constant collection pressure

A married couple may file jointly, or each spouse may file individually depending on their financial situation.

How Chapter 13 Is Different from Chapter 7

Understanding the difference between Chapter 7 and Chapter 13 is important:

  • Chapter 7 bankruptcy may involve selling non-exempt property to pay creditors and is typically completed in about four months.

  • Chapter 13 bankruptcy does not require selling assets. Instead, debts are reorganized into a manageable monthly payment plan.

Chapter 13 usually lasts:

  • Three years if you qualify based on income, or

  • Five years if your income is above your state’s median level.

This longer process allows debtors to gradually repay what they owe while staying protected from creditors.

Filing Chapter 13 to Stop Foreclosure

One of the biggest advantages of Chapter 13 bankruptcy is its ability to stop foreclosure immediately.

As soon as a bankruptcy petition is filed, an “automatic stay” goes into effect. This legal protection:

  • Stops foreclosure proceedings

  • Prevents collection calls and lawsuits

  • Halts wage garnishments and bank levies

Under Chapter 13, you can:

  • Catch up on missed mortgage payments over time

  • Resume normal monthly mortgage payments

  • Avoid losing your home to foreclosure

This makes Chapter 13 one of the most effective options for homeowners who have fallen behind but want to keep their property.

Using Chapter 13 Bankruptcy to Stop Foreclosure and Keep Your Home

If you are searching for ways to stop foreclosure, avoid foreclosure, or keep your home, Chapter 13 bankruptcy may be one of the strongest legal options available.

Many homeowners don’t realize that filing bankruptcy to stop foreclosure is not only possible—it is often the fastest and most reliable method.

Here’s how Chapter 13 bankruptcy helps homeowners:

  • Chapter 13 bankruptcy to stop foreclosure allows you to halt a foreclosure sale immediately.

  • You can use filing bankruptcy and keeping your home as a strategy to get caught up on past-due mortgage payments.

  • A Chapter 13 repayment plan gives you up to five years to repay missed payments instead of paying them all at once.

  • Interest, penalties, and fees can often be reduced or reorganized.

For homeowners facing a foreclosure deadline, filing Chapter 13 bankruptcy to stop foreclosure can create breathing room and prevent a lender from taking your property.

Instead of losing your home, Chapter 13 lets you:

  • Reinstate your mortgage

  • Spread delinquent payments over manageable installments

  • Eliminate or reduce other unsecured debts

  • Focus your income on saving your home

If you’re worried about foreclosure, speaking with a qualified bankruptcy professional about Chapter 13 bankruptcy and keeping your home can help you understand whether this path fits your situation.

Requirements Before Filing Chapter 13

There are several steps you must take before filing:

  • Complete a credit counseling course within six months prior to filing

  • Be current on federal income tax filings

  • Provide recent tax returns and pay stubs

  • List all creditors and debts—no debts can be left out

The bankruptcy petition requires detailed financial information, including:

  • Monthly income

  • Living expenses

  • Assets and property

  • Debts and balances

Accuracy is critical. Mistakes or omissions can result in case dismissal or serious legal consequences.

Creating the Chapter 13 Repayment Plan

The repayment plan is the core of a Chapter 13 case.

It is designed based on:

  • Your income

  • Household size

  • Type and amount of debt

  • Necessary living expenses

While forms are available online, creating a workable and court-approved plan can be complex. Many people choose to work with an experienced bankruptcy attorney to avoid costly errors.

Costs of Filing

The court filing fee for a Chapter 13 bankruptcy case is $310. If needed, the court may allow this fee to be paid in installments.

What Happens After You File

Once your Chapter 13 petition is filed:

  • Collection actions must stop immediately

  • Creditors cannot call or sue you

  • Co-signers are generally protected

A bankruptcy trustee will be assigned to your case and will:

  • Review your paperwork

  • Schedule a 341 Meeting of Creditors

  • Evaluate your repayment plan

At the 341 hearing, you will answer basic questions under oath about your finances. Most meetings last only 5–10 minutes.

Making Payments in Chapter 13

After filing:

  • You no longer pay creditors directly

  • All payments go to the bankruptcy trustee

  • The trustee distributes funds according to the plan

The first payment is due 30 days after filing, even if the plan has not yet been fully approved.

How Debts Are Treated

Debts are handled in order of priority:

  1. Priority debts – taxes and bankruptcy costs (must be paid in full)

  2. Secured debts – mortgages and car loans

  3. Unsecured debts – credit cards, medical bills, personal loans

Unsecured debts often do not need to be paid in full and may be partially or completely discharged at the end of the plan.

What Happens If You Can’t Keep Up

If you fall behind on payments, the court can dismiss your case. However, if your income drops due to illness, job loss, or hardship, you may be able to:

  • Modify your plan, or

  • Convert your case to Chapter 7 bankruptcy

Receiving a Discharge

At the end of the repayment plan, you can receive a Chapter 13 discharge if:

  • All plan payments were made

  • Child support and alimony are current

  • A required financial management course is completed

Most remaining unsecured debts are eliminated at this point.

Some debts cannot be discharged, including:

  • Student loans (in most cases)

  • Child support and alimony

  • Certain taxes

  • Criminal fines

Life After Chapter 13 Bankruptcy

A Chapter 13 bankruptcy stays on your credit report for seven years, which is less than the ten years associated with Chapter 7.

Many people are able to rebuild credit more quickly because:

  • Some debts show consistent payment history

  • Balances are reduced or eliminated

  • Lenders view post-bankruptcy borrowers as lower risk

New credit offers may come with higher interest rates, so it’s important to rebuild slowly and responsibly.

Final Thoughts

Chapter 13 bankruptcy was created to help honest individuals regain control of their finances without losing everything they own.

For homeowners in particular, it offers a real opportunity to:

  • Stop foreclosure

  • Avoid foreclosure

  • Catch up on mortgage payments

  • Keep their home while eliminating other debt

If you are struggling with overwhelming debt or facing foreclosure, learning more about Chapter 13 bankruptcy to stop foreclosure could be the first step toward a fresh financial start.

Need Help Understanding Your Options?

Bankruptcy laws can be complicated, and every financial situation is different. Speaking with a qualified bankruptcy professional can help you determine whether filing bankruptcy to stop foreclosure is the right solution for you.