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Can I stop foreclosure after falling behind on Chapter 13 payments?

Can I stop foreclosure after falling behind on Chapter 13 payments?

Full question:

My husband and I filed a chapter 13 about a year and a half ago. We have recently gotten behind on our house payment which was part of the chapter 13. Is there anything I can do to stop the foreclosure since this is the second time it is happening?

Category: Bankruptcy
Date: 04/07/2025
State: Illinois

Answer:

If you have fallen behind on your house payments included in your Chapter 13 plan, there may be options available to stop foreclosure. First, check if you complied with your Chapter 13 plan. If you did, you might be eligible to file for Chapter 13 again, as the law has allowed multiple filings if previous plans were completed without abuse. However, recent law changes may have introduced new conditions, so it’s important to consult with a legal expert familiar with the latest regulations in your state.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Can the bank foreclose while in Chapter 13?

Yes, a bank can initiate foreclosure proceedings while you are in Chapter 13 bankruptcy if you fall behind on your mortgage payments. However, you have the option to propose a plan to catch up on missed payments. If you comply with your Chapter 13 plan, this may help protect you from foreclosure. It's crucial to communicate with your attorney and the bankruptcy court about your situation.

Can I lose my house in Chapter 13?

Yes, you can lose your house in Chapter 13 if you do not adhere to your repayment plan or if you fall behind on your mortgage payments. If you miss payments, the lender may seek to foreclose. However, if you stay current on your Chapter 13 payments and your mortgage, you can typically keep your home. Consulting with a legal expert can provide guidance tailored to your situation.

What if I can't afford my Chapter 13 payments?

If you cannot afford your Chapter 13 payments, you should contact your bankruptcy attorney immediately. You may be able to modify your repayment plan to make it more manageable. Additionally, you can request a hardship discharge or convert your case to Chapter 7, depending on your circumstances. It's essential to act quickly to avoid potential foreclosure or dismissal of your case.

What is the statute limit for Chapter 13 debt?

As of now, the debt limits for Chapter 13 are approximately $465,275 for unsecured debts and $1,395,875 for secured debts. These limits are adjusted periodically, so it's important to check for the latest figures. If your debts exceed these amounts, you may have to consider other bankruptcy options. Consulting with a bankruptcy attorney can help clarify your eligibility.

What happens if you stop paying on a Chapter 13?

If you stop making payments on your Chapter 13 plan, the bankruptcy court may dismiss your case. This can lead to the loss of protections against creditors, including foreclosure on your home. It's crucial to address any payment issues with your attorney as soon as possible to explore options like modifying your plan or seeking a temporary suspension.

What happens if I quit paying my Chapter 13?

Quitting payments on your Chapter 13 plan can result in the dismissal of your bankruptcy case. This means you will lose the protections against creditors, and they may resume collection actions, including foreclosure. If you are struggling to make payments, it's vital to consult with your attorney to discuss potential modifications or other solutions.