When people think about bankruptcy, they often picture losing everything—including their home. But the truth is, Chapter 13 bankruptcy is one of the most powerful tools available to stop foreclosure and protect your house. Unfortunately, myths and misunderstandings keep many homeowners from considering it.
Let’s bust those myths and explain how Chapter 13 really works—especially if you’re trying to keep your home.
🧾 Myth #1: You’ll Lose Your Home in Bankruptcy
Truth: Chapter 13 is designed to help you catch up on missed mortgage payments and stop foreclosure.
Once you file, an automatic stay takes effect immediately—this legally prevents your lender from continuing with foreclosure, even if your sale date is just days away.
You can then propose a repayment plan that gives you up to 5 years to catch up on the missed payments while staying current on your regular mortgage.
💳 Myth #2: Chapter 13 Is Just Like Chapter 7, But Slower
Truth: Chapter 13 is completely different from Chapter 7.
- Chapter 7 wipes out debts fast but doesn’t help you catch up on secured debts like a mortgage.
- Chapter 13 gives you time to reorganize debt, pay back arrears over time, and protect your property.
It’s not a “second-choice” bankruptcy—it’s the right choice for many people who want to keep their assets.
⏳ Myth #3: You Must Pay All Your Debts in Chapter 13
Truth: In many cases, you only pay a portion of your unsecured debt (credit cards, medical bills), or even none at all.
Your repayment plan is based on your income, expenses, and assets—not on the full amount you owe. Many people finish their Chapter 13 plan having paid only a small fraction of their total unsecured debt.
🏠 How Chapter 13 Helps You Keep Your Home
Here’s how it works:
- Stops foreclosure immediately with the automatic stay
- Allows you to catch up on mortgage arrears over 3–5 year
- May strip off second mortgages or HELOCs in certain cases
- Gives you breathing room from credit cards, lawsuits, and garnishments so you can focus on saving your home
It also protects other assets like your car, even if you’re behind on payments.
💡 What If I Can’t Afford My Mortgage, Even With a Plan?
If your mortgage is truly unaffordable, Chapter 13 might not be the best long-term solution—but it can give you time to explore:
- Loan modification
- Short sale
- Selling the home on your terms (instead of at a foreclosure auction)
We help clients navigate these options without panic or pressure.
🏁 The Bottom Line
Chapter 13 isn’t a punishment—it’s a legal lifeline for people who’ve hit a financial rough patch but want to get back on track, keep their home, and move forward with dignity.
At Amerihope Alliance Legal Services, we’ve helped thousands of homeowners stop foreclosure and stay in their homes. If you’re behind on mortgage payments or facing legal threats, don’t wait until it’s too late. Chapter 13 could be the solution you didn’t know you had.
