Can I discharge my mortgage debt and still keep the house?

No — not in the way that phrase suggests. A discharge relieves personal liability, but Arizona's court guidance is explicit that it does not eliminate any mortgage or security interest the debtor granted to a lender. The lien stays on the property. If payments stop, the lien holder can generally pursue the collateral, so keeping the home realistically means continuing to pay for it.

Does filing stop a foreclosure sale?

Filing operates as an automatic stay of acts to enforce a lien against property of the estate and to obtain possession of it (11 U.S.C. § 362(a)), which commonly halts a pending foreclosure. Timing is decisive: Arizona's court pamphlet warns that you must file before the sale is completed under state law. A creditor may also seek relief from the stay under § 362(d).

How do mortgage arrears get caught up in Chapter 13?

Through the plan. Section 1322(b)(5) allows a plan to provide for curing a default within a reasonable time while maintaining payments on a debt whose last payment falls due after the plan ends. The past-due amount is stated in the plan and paid over the plan term, while the regular monthly payment continues — often through the trustee, depending on your district.

Why does my district make me pay the mortgage through the trustee?

That is a conduit payment requirement, and several districts impose one. Kansas requires it when the debtor is delinquent as of the petition date or becomes delinquent later (D. Kan. LBR 3015(b).2); Arizona requires conduit payments in the plan form absent a court order (Ariz. LBR 2084-4). It gives the trustee visibility into whether the ongoing payment is actually being made.

What does it cost to file?

The Chapter 13 filing fee is $235 (28 U.S.C. § 1930(a)(1)(B)) and Chapter 7 is $245 (28 U.S.C. § 1930(a)(1)(A), (f)(1)). Both carry a $78 administrative fee, and Chapter 7 adds a $15 trustee surcharge. Attorney fees are separate and vary widely. The statute permits installment payment of the Chapter 13 fee for an individual or joint case.

Is a second mortgage treated differently from a first?

It can be, and the difference turns on valuation and local procedure rather than a simple rule. Delaware's local rules treat avoidance of junior liens on real estate as a nonstandard plan provision requiring an adversary proceeding and specific treatment of the resulting unsecured claim (Del. Bankr. L.R. 3023-1). Whether it is available in your case is a question for a lawyer in your district.

Homes & mortgages

Mortgage Debt in Bankruptcy: Keeping a Home, Curing Arrears, and What the Code Actually Allows

Bankruptcy treats a mortgage as two separate things: your personal obligation to pay, and the lender's lien on the house. A discharge can erase personal liability, but the lien survives and the lender can still foreclose. Chapter 13 lets a plan cure a default over time while you maintain payments (11 U.S.C. § 1322(b)(5)), which is why people trying to keep a home with arrears usually look there.

Key points

A bankruptcy discharge relieves personal liability for a debt but does not eliminate a mortgage or other security interest in your property.
Filing operates as an automatic stay that halts enforcement of liens and acts to obtain possession of estate property (11 U.S.C. § 362(a)).
A Chapter 13 plan may provide for curing a default within a reasonable time while maintaining payments on a long-term mortgage (11 U.S.C. § 1322(b)(5)).
A Chapter 13 plan generally may not modify a claim secured only by a security interest in the debtor's principal residence (11 U.S.C. § 1322(b)(2)).
Many districts require ongoing mortgage payments to run through the trustee as "conduit payments" rather than directly to the servicer.

If you are behind on a mortgage and reading this at 1 a.m., the question underneath everything is usually the same: can I keep the house. Bankruptcy law does not answer that with a yes or a no. It gives you a set of tools, and which ones are available depends on whether you can resume and sustain the payment.

How does bankruptcy actually treat a mortgage?

A mortgage is two legal things at once, and bankruptcy touches them differently. The first is your promise to repay — a personal obligation. The second is the lender's lien, a charge against the property that secures that promise. The Bankruptcy Code defines a lien broadly as a charge against or interest in property to secure payment of a debt (11 U.S.C. § 101).

A discharge addresses the first thing, not the second. The District of Arizona's court guidance puts it plainly: the discharge of a debt only relieves the debtor of personal liability for the debt; it does not eliminate any mortgage or security interest in the debtor's property that the debtor granted to a lender.

That is why "discharge the mortgage debt but keep the house" is only half a plan. If nobody is paying, the lien holder can generally pursue the collateral once the case ends or the stay is lifted.

Personal liability — what a discharge can reach.
The lien on the property — what a discharge does not reach.
Arrears — the past-due amount that has to be dealt with separately if you keep the home.

What does filing do to a foreclosure that is already moving?

Filing a petition operates as a stay applicable to all entities of a broad list of collection activity, including the commencement or continuation of a judicial proceeding against the debtor, any act to obtain possession of property of the estate, and any act to create, perfect, or enforce any lien against property of the estate (11 U.S.C. § 362(a)).

Timing matters enormously. Arizona's court pamphlet warns that if you are filing to save your home from foreclosure, you must do so before the mortgage company completes the foreclosure sale under state law, or you may lose your home. A sale that has already closed is a different problem than a sale that is scheduled.

The stay is also not permanent. A secured creditor can move for relief under 11 U.S.C. § 362(d), and thirty days after such a request the stay terminates as to that party unless the court orders it continued (11 U.S.C. § 362(e)).

What does federal law say about curing mortgage arrears?

Two subsections of 11 U.S.C. § 1322(b) do most of the work here, and they pull in opposite directions.

Section 1322(b)(2) says a plan may modify the rights of holders of secured claims — but expressly carves out a claim secured only by a security interest in real property that is the debtor's principal residence. That is the anti-modification rule. You generally cannot rewrite the interest rate or principal on a first mortgage on your home.

Section 1322(b)(5) then opens the door that matters. Notwithstanding paragraph (2), a plan may provide for the curing of any default within a reasonable time and maintenance of payments while the case is pending on any claim on which the last payment is due after the date on which the final payment under the plan is due. Section 1322(b)(3) separately allows a plan to provide for the curing or waiving of any default.

In practice that combination is the reason a homeowner with arrears looks at Chapter 13: catch up the past-due amount through the plan, stay current going forward.

The two subsections that govern a home mortgage in a Chapter 13 plan
Provision	What it says	Practical effect
11 U.S.C. § 1322(b)(2)	A plan may modify secured claims, other than a claim secured only by a security interest in the debtor's principal residence	The terms of a home mortgage generally cannot be rewritten in the plan
11 U.S.C. § 1322(b)(3)	A plan may provide for the curing or waiving of any default	A default is curable rather than accelerated
11 U.S.C. § 1322(b)(5)	Notwithstanding (b)(2), a plan may cure a default within a reasonable time and maintain payments on a long-term debt	Arrears are paid through the plan while regular payments continue

What about a second mortgage or a junior lien?

This is where the anti-modification rule's wording carries weight. Section 1322(b)(2) protects a claim secured only by a security interest in real property that is the debtor's principal residence — and courts and local practice treat the treatment of junior liens as a distinct question requiring its own process.

Delaware's local rules recognise this directly: a Chapter 13 plan containing "avoidance of junior liens on real estate" is a nonstandard provision that must be disclosed, with an adversary proceeding to be filed and specific treatment stated for the unsecured claim of an avoided lienholder (Del. Bankr. L.R. 3023-1). Western District of North Carolina plan forms similarly contemplate a request for valuation of security and modification of undersecured claims.

The short version: it is a contested, procedure-heavy request, not a checkbox. Whether it is available in your case turns on valuation, on your district's practice, and on facts we cannot see. Ask a lawyer in your district before assuming it applies.

Where do state and local rules change the answer?

The Code is federal, but a great deal of what a homeowner actually experiences is set district by district. The most common example is conduit payments — whether your ongoing mortgage payment goes to the servicer directly or through the Chapter 13 trustee.

Some districts require it. Kansas provides that regular payments owed to a creditor holding a claim secured by the debtor's principal residence must be made to the trustee if the debtor is delinquent as of the petition date or becomes delinquent afterward (D. Kan. LBR 3015(b).2). Arizona requires conduit payments in the plan form and excuses them only by court order (Ariz. LBR 2084-4). Eastern North Carolina requires debtors to remit all mortgage payments to the trustee for disbursement (E.D.N.C. LBR 3070-2). Vermont and Western North Carolina have their own conduit frameworks.

State law also governs foreclosure timing and homestead protection. Those figures live on the state pages, not here.

Whether ongoing payments are made through the trustee or directly.
Local plan forms and how arrears must be stated in them.
How and when a mortgage creditor must notice a payment change.
State foreclosure timelines and homestead exemption amounts — see your state hub.

What does this look like in practice, month to month?

Assume you are three payments behind and the servicer has started foreclosure. In a Chapter 13 case, the plan states the ongoing monthly payment and the estimated prepetition arrearage, and in most districts you begin paying the trustee before confirmation. Western Oklahoma's plan form asks for the monthly ongoing payment, a "gap payment" covering the months between the petition date and the first plan payment, and the estimated arrearage with an interest rate.

Ongoing changes are tracked formally. Under Fed. R. Bankr. P. 3002.1, the claim holder must file a notice of any change in the payment amount — including one from an interest-rate or escrow adjustment — served on you, your attorney, and the trustee, generally at least 21 days before the new payment is due.

At the end, completion is documented. Western Missouri's rules describe a notice of final cure payment process after which the mortgage is deemed current absent a timely objection.

What documents and information are involved?

Almost everything here runs on the loan paperwork and the numbers in it, so gather these before a consultation rather than during one.

Secured debts are scheduled separately from unsecured ones. Official Form 106D captures creditors who have claims secured by your property; Official Form 106E/F captures unsecured claims. Alaska's filing packet illustrates why the split matters for a second mortgage: on a $300,000 home with a $200,000 first mortgage, a $150,000 second mortgage leaves $100,000 of remaining property value and a $50,000 unsecured portion.

Kansas and Arizona both require a Mortgage Creditor Checklist and an authorization to release information, delivered to the trustee within days of filing. Arizona also requires you to forward every escrow notice, statement and default notice you receive.

The note and mortgage or deed of trust, and any modification agreement.
A recent statement showing the monthly payment, escrow, and the total past due.
Any foreclosure notice, including a scheduled sale date.
Proof of hazard insurance — Arizona's guidance notes you must maintain insurance and name the lender as loss payee.
A recent valuation of the home, if a junior lien is in question.

What should you ask a lawyer about your mortgage?

You are not expected to work this out alone, and the questions below tend to surface the facts that actually decide the outcome. Filing costs are modest relative to what is at stake: 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), and Chapter 7 is $245 (28 U.S.C. § 1930(a)(1)(A), (f)(1)) plus the same $78 administrative fee and a $15 trustee surcharge (Bankruptcy Court Miscellaneous Fee Schedule, Item 9). The statute permits installment payment of the Chapter 13 fee for an individual case.

Bring the arrearage number with you. A plan that cures a default has to be one you can actually sustain alongside the regular payment, and that arithmetic is the whole conversation.

Given my arrears and income, is curing the default over a plan realistic for me?
Does this district require conduit payments through the trustee, and what does that do to my monthly figure?
Is the foreclosure sale date already set, and what is the cutoff under state law?
Does anything about my second mortgage warrant a valuation motion or adversary proceeding here?
If I cannot keep the house, what does surrender look like and what deficiency risk remains?
What happens to the mortgage if I file Chapter 7 instead and simply keep paying?

Frequently asked questions

Can I discharge my mortgage debt and still keep the house?: No — not in the way that phrase suggests. A discharge relieves personal liability, but Arizona's court guidance is explicit that it does not eliminate any mortgage or security interest the debtor granted to a lender. The lien stays on the property. If payments stop, the lien holder can generally pursue the collateral, so keeping the home realistically means continuing to pay for it.
Does filing stop a foreclosure sale?: Filing operates as an automatic stay of acts to enforce a lien against property of the estate and to obtain possession of it (11 U.S.C. § 362(a)), which commonly halts a pending foreclosure. Timing is decisive: Arizona's court pamphlet warns that you must file before the sale is completed under state law. A creditor may also seek relief from the stay under § 362(d).
How do mortgage arrears get caught up in Chapter 13?: Through the plan. Section 1322(b)(5) allows a plan to provide for curing a default within a reasonable time while maintaining payments on a debt whose last payment falls due after the plan ends. The past-due amount is stated in the plan and paid over the plan term, while the regular monthly payment continues — often through the trustee, depending on your district.
Why does my district make me pay the mortgage through the trustee?: That is a conduit payment requirement, and several districts impose one. Kansas requires it when the debtor is delinquent as of the petition date or becomes delinquent later (D. Kan. LBR 3015(b).2); Arizona requires conduit payments in the plan form absent a court order (Ariz. LBR 2084-4). It gives the trustee visibility into whether the ongoing payment is actually being made.
Can a Chapter 13 plan reduce my mortgage balance or interest rate?: Generally not on a first mortgage against your home. Section 1322(b)(2) permits a plan to modify secured claims but excludes a claim secured only by a security interest in real property that is the debtor's principal residence. Curing a default under § 1322(b)(5) is different from modifying the loan terms, and it is the route that ordinarily applies to a home mortgage.
What happens if my mortgage payment changes during the case?: The claim holder must file a notice of the change, including one resulting from an interest-rate or escrow adjustment, and serve it on you, your attorney, and the trustee — generally at least 21 days before the new payment is due (Fed. R. Bankr. P. 3002.1(b)). Special timing rules apply to home-equity lines of credit. You or the trustee may respond.
What does it cost to file?: The Chapter 13 filing fee is $235 (28 U.S.C. § 1930(a)(1)(B)) and Chapter 7 is $245 (28 U.S.C. § 1930(a)(1)(A), (f)(1)). Both carry a $78 administrative fee, and Chapter 7 adds a $15 trustee surcharge. Attorney fees are separate and vary widely. The statute permits installment payment of the Chapter 13 fee for an individual or joint case.
Is a second mortgage treated differently from a first?: It can be, and the difference turns on valuation and local procedure rather than a simple rule. Delaware's local rules treat avoidance of junior liens on real estate as a nonstandard plan provision requiring an adversary proceeding and specific treatment of the resulting unsecured claim (Del. Bankr. L.R. 3023-1). Whether it is available in your case is a question for a lawyer in your district.

Sources

11 U.S.C. § 1322 — Contents of plan · official source
11 U.S.C. § 362 — Automatic stay · official source
11 U.S.C. § 101 — Definitions · official source
Fed. R. Bankr. P. 3002.1 — Chapter 13—Claim Secured by a Security Interest in the Debtor's Principal Residence · official source
U.S. Bankr. Ct. D. Ariz., Choosing Your Chapter: What can Bankruptcy do for you? What will it do to you?
D. Kan. LBR 3015(b).2 — Conduit Mortgage Payments in Chapter 13 Cases
Ariz. LBR 2084-4 — Plan
E.D.N.C. LBR 3070-2 — Chapter 13 — Residential Mortgage Payments
Del. Bankr. L.R. 3023-1 — Special Procedures in Chapter 13 Matters
W.D. Okla. General Order 26-01 — Adoption of Amended Local Rules
W.D. Mo. Local Rules of Practice (adopted January 5, 2026)
U.S. Bankr. Ct. D. Alaska, The Forms Individuals and Married Couples Need to File Bankruptcy
WDNC Bankruptcy Local Rules Sept 2021.pdf
28 U.S.C. § 1930(a)(1)(B)
28 U.S.C. § 1930(a)(1)(A), (f)(1)
Bankruptcy Court Miscellaneous Fee Schedule, Item 8
Bankruptcy Court Miscellaneous Fee Schedule, Item 9

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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