Can chapter 13 save my home from foreclosure?

Can chapter 13 help me save my house from foreclosure?

The short answer in most cases is yes.  In most cases a client who comes in to see us can save their home from foreclosure by filing a chapter 13 petition.

Before we answer that question for you personally, we first need to meet together.  I am happy to offer a free in office consultation so we can sit down and discuss your concerns together.

We will spend the first five to ten minutes of that meeting reviewing your personal situation to evaluate if such an attempt makes sense.  If it does (and eight out of ten times it does), then I spend another half hour or so gathering basic information about debts, possessions, income and living expenses.  Either way the meeting is free.

At the end of that first meeting together I will go over carefully with you a list of documents to gather together so that we can prepare for the next meeting; which is the signing meeting.

In a chapter 13, the client generally need only pay the initial costs to get filed, which adds up to only $335.  My attorney fees can be paid by the chapter 13 trustee out of monies funding the chapter 13 plan.


Now how does it all work?  How can a chapter 13 save your home?

I find almost all of my clients fall behind their home payments during a time of severe life experiences.  Clients that come to see me have suffered family, health or job loss.  In many cases it is two or three types of loss at once.

As life then begins to come back together, the client realizes the debt burden grew so great that even though the issues may now be better, the resolution of their major life concerns are a dollar short and a day late.

That’s where the chapter 13 comes in.  The filing of the case stretches both the money you have to deal with the situation and the time you have to get it all done.  In a chapter 13, one simply begins to make the normal mortgage payment to the chapter 13 trustee and we then reshape the arrears (and all other debt) into the remainder of an affordable monthly chapter 13 payment.

For example, a $6,000 home arrears situation (requiring $6,000 to cure the home mortgage) can be dealt with by a low payment of only $100 a month over 60 months plus a little interest.  We can often find great relief on items like high interest car loans.  Such clients retain their cars even though we reduce interest and restructure payments into affordable payments within the plan.

Most chapter 13 payments then include the monthly mortgage payment, some amount to deal with all the other debt, and then a small amount to fund administrative costs of the chapter 13.  We discuss this together at the beginning of the first meeting and then continue working on it so that by the end of the second meeting a client has not only a good idea of what the chapter 13 payment will be, but they will also see how they can afford to make the payment.

Again, not every case succeeds.  However the majority of my clients are successful in keeping their homes and vehicles.  My goal and mission is to be as realistic as possible, as early as possible, so that my clients are armed with a real understanding of what can and cannot be done as soon as possible.

Chapter 13 is our favorite bankruptcy chapter.  It is a great way to deal with almost all forms of debt, stretch your payments out so they are affordable and keep the items most important (such as your house and car).  As such a blog can only cover the very basics, I invite you to meet with me to see how it may help in your personal situation.

Please accept our invitation to call for your free office consultation at your earliest convenience.

Qualification for a Chapter 13 Bankruptcy

Many of our clients find a Chapter 13 bankruptcy filing is by far the most powerful and effective strategy for a person struggling with non-cooperative creditors.

Chapter 13 isn’t even really “bankruptcy” in the traditional sense of the word but is more of a “Wage Earner’s Repayment Plan.”

In order to qualify a client for chapter 13 we only need to show the client has minimal income after the payment of secured debts (mortgages, car payments, etc.) and basic lifestyle needs ( food, utilities, etc.).  The payment to unsecured creditors can be as little as $20 a month and still qualify.

Further good news is that you don’t have to figure this all out on your own.  Kerry Hettinger, PLC works with you to create a repayment plan that saves you the most money possible.

Among the most common reasons for filing a Chapter 13 rather than a Chapter 7 (full bankruptcy) are the following:

1. Ch 7 would result in loss of something one really needs to keep (house, car, business, farm, etc.).

2. Client makes too much money to file a Ch 7 but not enough to pay off their debt.

3. Client filed a Ch 7 less than 8 years ago (only 4 years for a Ch 13).

4. Certain debt not dischargeable in a Ch 7 can be discharged or managed much better in a Ch 13 (tax, student loan, fraud, etc.).

Because of the many advantages of a Chapter 13 over other ways to deal with debt, Congress created additional qualification tests.  The two primary tests have to do with who can file a Chapter 13 and how much debt they can have.  First, only a person can file a chapter 13 (no Corps or LLCs).  Second, because it is inexpensive to file and very convenient, a Chapter 13 Debtor can only have so much debt ($360,475 unsecured, $1,081,400 secured).

Call today to have any questions answered and see if you qualify for this powerful form of debt management.


Additional advantages to filing a Chapter 13 (in addition to preventing a home foreclosure)

  • Stop creditor attempts to repossess your car, and even force a recently repossessed car to be returned to you (generally a 10 day window).


  • Stop your wages, bank accounts and tax refunds from being garnished, and even force the return of previously garnished funds to you (if over $600 taken within 90 days).


  • Stop harassment by your creditors. No more phone calls or letters.  Kerry Hettinger, PLC is happy to help you take care of everything.


  • Pay off your credit cards, medical debts and other unsecured debts  “in part” or “in full” (with no interest).  It all depends on what you can actually afford to pay, not on what the creditors want.


  • Stop further obligations to creditors whose services you have not yet fully received, such as health clubs, dance studios, time share fees, leases, etc.


  • Void certain liens against your possessions and other personal items.  In some cases we can even void out second mortgages.


  • Manage tax bills and repayment.  Older income taxes are actually dischargeable.  Recent taxes can be managed through stretching out the payment, as well as applying only reasonable interest and no more penalties.


  • Student loan obligations- while not generally dischargeable- are managed through getting back on track with affordable payments and then resetting when the ch 13 is complete.


  • No need to wait 8 years from an earlier chapter 7 bankruptcy filing (can file and obtain a new discharge after only 4 years).


  • Call to schedule a free consultation to see which of these benefits, and possibly even others, will apply in your situation.