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Homes & mortgages

Keeping a Home in Chapter 13 Bankruptcy

Chapter 13 lets a homeowner cure a mortgage default over time while keeping up regular payments, under 11 U.S.C. § 1322(b)(5). Unlike other secured debts, a mortgage on your principal residence generally cannot be rewritten (§ 1322(b)(2)). Equity does not force a sale, but the plan must pay unsecured creditors at least what Chapter 7 liquidation would (§ 1325(a)(4)).

Key points

  • A Chapter 13 plan may cure a mortgage default within a reasonable time while maintaining regular payments on a loan whose last payment falls after the plan ends (11 U.S.C. § 1322(b)(5)).
  • A claim secured only by your principal residence is carved out of the general power to modify secured claims, so the loan terms themselves generally stay intact (11 U.S.C. § 1322(b)(2)).
  • Home equity above what your state exemption covers does not trigger a sale in Chapter 13; instead it raises the floor of what unsecured creditors must receive (11 U.S.C. § 1325(a)(4)).
  • Confirmation also requires that the court find you will actually be able to make all plan payments (11 U.S.C. § 1325(a)(6)).
  • Filing generally triggers an automatic stay under 11 U.S.C. § 362, but a foreclosure sale already completed under state law before filing is a different situation.

If you are behind on a mortgage and a foreclosure date is coming, Chapter 13 is the chapter built for that problem. It is a repayment plan that gives you a structured way to catch up on what you missed while you keep paying the loan going forward. This page walks through the mechanics, the equity question that worries most homeowners, and what to bring to a lawyer.

How does Chapter 13 actually let you keep a house?

Chapter 13 works on a house through two separate moving parts, and it helps to keep them apart in your head.

The first part is the arrears — the payments you already missed. A plan may "provide for the curing of any default within a reasonable time," for a claim whose last payment comes due after the final plan payment (11 U.S.C. § 1322(b)(5)). A long-term mortgage almost always fits that description, so the past-due amount gets spread across the life of the plan instead of being demanded in one lump sum.

The second part is the ongoing payment. The same provision requires "maintenance of payments while the case is pending." One bankruptcy court's own guidance puts it plainly: under both Chapter 7 and Chapter 13, you must pay debts secured by property if you want to keep the property, which normally means continuing regular monthly mortgage payments (U.S. Bankr. Ct. D. Ariz., Choosing Your Chapter).

Cure the past. Maintain the present. Both, or neither works.

What changes the answer for your particular house?

Several facts move this outcome more than anything else, and none of them are things a website can decide for you.

Whether the foreclosure sale has already happened matters most. A district court's own guidance warns that if you are filing to save a home from foreclosure, you must do so before the mortgage company completes the foreclosure sale under state law, or you may lose the home (U.S. Bankr. Ct. D. Ariz., Choosing Your Chapter). That deadline is set by state foreclosure law, not by the Bankruptcy Code.

Whether you have income that can support both the ongoing payment and the arrears cure matters next. The court must find that you "will be able to make all payments under the plan and to comply with the plan" (11 U.S.C. § 1325(a)(6)).

  • Whether a foreclosure sale has already been completed under state law
  • Whether income is regular enough to carry the mortgage plus the arrears cure
  • How large the arrears are, since they must be cured within a reasonable time
  • Whether prior bankruptcy filings limit how long the automatic stay lasts (11 U.S.C. § 362)
  • Whether your debts fall within the Chapter 13 eligibility limits of 11 U.S.C. § 109

What does federal law say about modifying a mortgage?

This is where Chapter 13 treats your house differently from your car.

Section 1322(b)(2) lets a plan "modify the rights of holders of secured claims" — but it expressly excludes "a claim secured only by a security interest in real property that is the debtor's principal residence." So the general power to rewrite a secured claim stops at the front door of your home.

That exclusion is then qualified. Section 1322(b)(5) begins "notwithstanding paragraph (2) of this subsection" and permits curing the default and maintaining payments on a long-term claim. In other words: you generally cannot rewrite the mortgage, but you can catch up on it and keep it current.

One more limit is worth knowing. A discharge relieves personal liability but does not by itself erase a lien. As one court's FAQ page states, valid liens that existed before filing generally pass through bankruptcy unaffected (Bankr. N.D. Iowa official page — FAQs: Debtor).

Where do state and local rules change how this works?

Two layers sit on top of the federal statute, and both are local.

The first is your state's exemption law. Section 522(b)(3) lets a debtor claim property exempt under "State or local law that is applicable on the date of the filing of the petition" in the state where the debtor has been domiciled for the 730 days before filing. Homestead exemption amounts differ substantially from state to state. We publish verified figures on the state pages rather than restating them here.

The second is your district's local bankruptcy rules, which govern how the mortgage actually gets paid. Some districts require the trustee to disburse the ongoing mortgage payment — Vermont's rules define a "Conduit Mortgage Payment Plan" for exactly that (Vermont Local Bankruptcy Rules — 2024). One district requires that all mortgages the debtor is not current on "shall be paid through the Chapter 13 Plan" (W.D. Okla. LBR 7041-1). Another provides that the amount stated in the mortgage proof of claim controls over the plan unless the confirmation order says otherwise (D. Kan. LBR compilation).

What if you have too much home equity?

This is the single most common fear, and the answer is genuinely different in Chapter 13 than in Chapter 7.

In Chapter 13 there is no liquidation of your property. What equity does instead is set a floor on what your unsecured creditors receive. Under 11 U.S.C. § 1325(a)(4), the value distributed under the plan on each allowed unsecured claim must be "not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title" as of the plan's effective date. Practitioners call this the best-interests-of-creditors test.

The practical effect: nonexempt equity in a home does not produce a sale, it produces a larger plan payment. Whether that payment is affordable is a separate question the court reaches under § 1325(a)(6).

How much equity is exempt turns on your state's homestead exemption, so the arithmetic is state-specific.

What does this look like once the case is filed?

The sequence is fairly consistent, even though the local details vary.

Filing generally triggers the automatic stay under 11 U.S.C. § 362, which commonly halts collection activity including a scheduled foreclosure sale. That stay is not permanent or unconditional: a mortgage holder may ask the court for relief from it, and § 362(e) sets out how quickly that request gets heard.

Payments start early. Unless the court orders otherwise, the debtor must begin making plan payments "not later than 30 days after the date of the filing of the plan or the order for relief, whichever is earlier" (11 U.S.C. § 1326(a)(1)). Payments made before confirmation are held by the trustee and distributed if the plan is confirmed, or returned if it is not (§ 1326(a)(2)).

During the case, a mortgage holder must file notice of any payment change — including escrow or interest-rate adjustments — generally at least 21 days before the new payment is due (Fed. R. Bankr. P. 3002.1(b)(1)).

What documents and information are involved?

Chapter 13 is a documentation-heavy chapter, and the home-related paperwork is a distinct pile within it.

Exemptions are not automatic. As one court's instructions state, to exempt property you must list it on Schedule C: The Property You Claim as Exempt (Official Form 106C) (U.S. Bankr. Ct. D. Ariz., Instructions for Completing the Bankruptcy Petition). Your mortgage goes on Schedule D, which covers creditors who have claims secured by your property (U.S. Bankr. Ct. D. Alaska, The Forms Individuals and Married Couples Need to File Bankruptcy).

Income is calculated on Official Forms 122C-1 and 122C-2, which determine your commitment period and disposable income (Bankr. S.D. Iowa official guidance — Instructions).

Fees are fixed by schedule: the Chapter 13 filing fee is $235 (28 U.S.C. § 1930(a)(1)(B)), plus a $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8, effective December 1, 2023). Confirmation requires that fees required to be paid before confirmation have been paid (11 U.S.C. § 1325(a)(2)).

What should you ask a lawyer about your house?

Chapter 13 mortgage treatment is one of the areas where local practice matters most, and where a bad guess is expensive. Several courts' own guides say directly that you should have an attorney review your decision to file and your choice of chapter (U.S. Bankr. Ct. D. Alaska, The Forms Individuals and Married Couples Need to File Bankruptcy).

Bring the specifics. A lawyer can price out a plan far faster with your reinstatement quote and payoff figures in hand than from a description of the situation.

  • Has a foreclosure sale already occurred under my state's law, and what is my remaining window?
  • What is my exact arrearage, and can it be cured within a reasonable time on my income?
  • Does this district use conduit mortgage payments through the trustee, or do I pay the servicer directly?
  • How much of my home equity is exempt under my state's homestead exemption, and what does the § 1325(a)(4) test require my plan to pay?
  • Are there junior liens on the property, and does anything in this district's local rules address them?
  • Do prior filings affect how long the automatic stay lasts in my case?

Frequently asked questions

Can Chapter 13 stop a foreclosure sale?
Filing generally triggers the automatic stay under 11 U.S.C. § 362, which commonly halts a scheduled foreclosure sale. One court's guidance is direct about the timing: if you are filing to save your home from foreclosure, you must file before the mortgage company completes the foreclosure sale under state law. The stay is also subject to relief on a creditor's request.
Do I have to keep making my mortgage payment during Chapter 13?
Generally yes. Section 1322(b)(5) allows curing a default while requiring "maintenance of payments while the case is pending." A district court's own pamphlet states that under both Chapter 7 and Chapter 13 you must pay debts secured by property if you want to keep the property, which normally means continuing the regular monthly mortgage payment. Some districts route that payment through the trustee.
Will I lose my house in Chapter 13 if I have a lot of equity?
Chapter 13 does not liquidate your property. Nonexempt equity instead raises what your plan must pay unsecured creditors: under 11 U.S.C. § 1325(a)(4), they must receive at least what they would get in a Chapter 7 liquidation. So equity generally translates into a larger plan payment rather than a sale. Affordability is then tested separately under § 1325(a)(6).
Can a Chapter 13 plan lower my mortgage interest rate or principal?
Generally not for a loan secured only by your principal residence. Section 1322(b)(2) permits modifying the rights of secured claim holders but expressly excludes a claim secured only by real property that is the debtor's principal residence. Section 1322(b)(5) still allows curing the default and maintaining payments. Some districts have separate procedures addressing junior liens on a residence.
How long do I have to catch up on the missed payments?
Section 1322(b)(5) requires curing the default "within a reasonable time," without naming a fixed number of months. In practice the cure is spread across the plan, and the specific period depends on your plan, your district's practice, and your income. Confirmation additionally requires the court to find that you will be able to make all payments under the plan (11 U.S.C. § 1325(a)(6)).
What does it cost to file a Chapter 13 case?
The Chapter 13 filing fee is $235 under 28 U.S.C. § 1930(a)(1)(B), plus a $78 administrative fee under the Bankruptcy Court Miscellaneous Fee Schedule, Item 8. The statute permits an individual to pay the filing fee in installments. Attorney fees and trustee percentage fees are separate; the trustee's percentage fee is fixed under title 28 (11 U.S.C. § 1326(b)(2)).
When do plan payments start?
Unless the court orders otherwise, payments begin not later than 30 days after the plan is filed or the order for relief, whichever is earlier (11 U.S.C. § 1326(a)(1)). The trustee holds those payments until the plan is confirmed or confirmation is denied. If the plan is not confirmed, the trustee returns payments not yet due to creditors, after deducting any allowed administrative claim.
What happens if my mortgage payment changes mid-case?
The mortgage claim holder must file a notice of any change in the payment amount, including one resulting from an interest-rate or escrow-account adjustment, and serve it on you, your attorney, and the trustee (Fed. R. Bankr. P. 3002.1(b)(1)). It generally must be filed and served at least 21 days before the new payment is due. Home-equity lines of credit follow a separate annual-notice track.

Sources

By Antonio G. Jimenez, Esq. · Florida Bar No. 21022

Last reviewed July 26, 2026 · Sources verified July 26, 2026 · How we verify

Every figure on this page is drawn from a primary legal source and checked against our canonical legal database before publication. Bankruptcy.law is not a law firm and does not provide legal advice.

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