Can I Save My Home From Foreclosure If I File Bankruptcy?

If your mortgage company has filed foreclosure proceedings against you, you may still be able to save your home.  Your mortgage company will tell you the amount that you must pay to get the foreclosure case dismissed.  This amount can be substantial, and typically includes all the missed payments, late fees, attorney fees, and court costs.  By filing for Chapter 13 bankruptcy, you may  spread out the total arrearages you owe to the mortgage company over a three to five year period, in order to save your home.  So long as you make the required Chapter 13 plan payments, which are calculated by your lawyer, your mortgage company will not be allowed to sell your home in the foreclosure proceeding. 

In considering whether to file for Chapter 13 bankruptcy, you must consider all the costs, whether you can afford the required monthly payment, and whether filing for Chapter 13 would be the wisest choice for you.  Your Chapter 13 plan payment at a minimum will require you to pay the regular mortgage payment plus the amount of the mortgage arrearages spread out over the number of months you will be in Chapter 13, plus any attorney fees not paid before filing for Chapter 13, and the fee the Chapter 13 Trustee receives for administering your Chapter 13 case.  You also may be required to pay a percentage of the total of your other debts each month as part of your Chapter 13 plan.  There may also be other payments you would be required to make through your Chapter 13 plan as well, such as car payments, other installment payments, and income tax debt.  If you can live within the budget that the Chapter 13 Trustee will approve in order for you to make your Chapter 13 payments, you can indeed save your home.  When you complete all the required plan payments, you receive a discharge of those debts that are dischargeable, and you begin to make your regular mortgage payments again to your mortgage company.