Yes, you can stop foreclosure with Chapter 13 bankruptcy. The moment your petition is filed, an automatic stay under 11 U.S.C. § 362 halts the foreclosure, including a sale scheduled for the same day.1Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay Chapter 13 then gives you up to five years to catch up on the missed mortgage payments through a court-supervised repayment plan, while you keep making your regular monthly payments going forward. The protection is real, but it has conditions, and the case can fall apart if the numbers don’t work.
How the Automatic Stay Halts the Foreclosure
The stay takes effect the instant your Chapter 13 petition reaches the bankruptcy court. Your lender cannot continue a foreclosure lawsuit, hold a foreclosure sale, or take any other action to seize your home while the stay is in place.1Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay The stay also blocks other creditors from garnishing wages, calling about debts, or filing new lawsuits, which frees up cash you need for the mortgage.
Timing is unusually precise here. A petition filed Monday afternoon stops a sale scheduled for Tuesday morning. Courts have upheld stays filed hours before an auction. No judge has to sign an order first, and no hearing is required — the protection is automatic. But “automatic” cuts the other way if you have filed before, so it is worth knowing where the stay narrows or disappears entirely.
When the Stay Is Limited or Unavailable
One Prior Case Dismissed in the Past Year
If you had a bankruptcy case pending at any point during the previous year and it was dismissed, the automatic stay in your new case lasts only 30 days.1Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay After that, the stay disappears and your lender can resume foreclosure unless you get the court to extend it. Getting the extension requires filing a motion and proving the new case was filed in good faith before the 30 days run out. The court starts with a presumption that it was not, and clear and convincing evidence is needed to overcome that presumption.
Two or More Prior Cases Dismissed in the Past Year
If two or more bankruptcy cases were pending and dismissed during the prior year, no automatic stay arises at all.1Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay The lender can proceed as though nothing was filed. You can ask the court to impose a stay, but the burden is entirely on you, and many courts are skeptical of serial filings.
Lender Motions to Lift the Stay
Even a fully active stay can be lifted. Your mortgage lender can move for relief on “cause,” which most often means you stopped making mortgage payments that came due after you filed. A lender can also seek relief if you have no equity in the home and the property is not necessary to your reorganization.1Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay If the court grants the motion, the foreclosure picks up where it left off, even though your bankruptcy case continues.
Curing the Missed Payments Through a Repayment Plan
The stay buys time. The repayment plan is what actually saves the house. Federal law specifically allows a Chapter 13 plan to cure a mortgage default and maintain ongoing payments while the case is pending.2Office of the Law Revision Counsel. 11 USC 1322 – Contents of Plan The total amount you have fallen behind on — missed payments, late fees, and any lender attorney costs — gets divided into monthly installments spread over three to five years.3United States Courts. Chapter 13 – Bankruptcy Basics
Those catch-up payments go to the Chapter 13 trustee, who distributes them to the lender along with payments to your other creditors. Your plan has to show the court you earn enough regular income to cover the plan payment on top of your normal living expenses. If the math does not work on paper, the plan will not be confirmed.
Whether the plan lasts three years or five depends on your income. If your household income is below your state’s median, you can propose a three-year plan. Above the median, the court generally requires five years. Either way, every dollar of the arrearage has to be paid in full by the end of the plan. Chapter 13 does not reduce what you owe on a mortgage secured by your primary residence, and the law specifically prohibits modifying the terms of that mortgage.2Office of the Law Revision Counsel. 11 USC 1322 – Contents of Plan
Staying Current on the Mortgage While the Plan Runs
The plan addresses past-due amounts. You still owe every regular monthly mortgage payment that comes due after filing.3United States Courts. Chapter 13 – Bankruptcy Basics Those current payments usually go directly to the lender, separate from the arrearage payments flowing through the trustee. Some districts route everything through the trustee, so local rules and your attorney will dictate the process.
Falling behind on post-filing mortgage payments is the single fastest way to lose the house in a Chapter 13 case. The lender will file a motion to lift the stay, and courts grant these routinely when the debtor cannot show they are keeping up. At that point the foreclosure resumes and you have spent money on filing fees and plan payments with nothing to show for it. Most Chapter 13 foreclosure saves that fail do not fail at the filing stage; they fail months later, when current mortgage plus plan payment plus living expenses turns out to be more than the budget can carry.
Stripping Junior Liens on an Underwater Home
Chapter 13 offers one tool that directly reduces what is attached to your home. If your first mortgage balance exceeds the home’s current market value, any junior lien — a second mortgage or home equity line of credit — has no collateral supporting it. The court can reclassify that junior lien as unsecured debt, treated like credit card or medical debt in your plan.
Suppose your home is worth $280,000 and your first mortgage is $300,000. A second mortgage of $60,000 has zero equity behind it and qualifies for stripping. If the home were worth $310,000 instead, the second mortgage would be partly secured by that $10,000 of equity above the first, and stripping would not be available.
Lien stripping only works if you complete the entire plan. If the case is dismissed before completion, the junior lien snaps back onto the property as though it was never stripped. The junior lien holder may also challenge your home’s appraised value, and the court will hold a hearing to resolve the dispute. When stripping succeeds, any remaining balance on the junior loan is discharged at the end of the plan.
Who Qualifies to File Chapter 13
Not everyone can use Chapter 13. Three requirements decide eligibility:
- Regular income. You need a reliable income source — wages, self-employment, pension, or Social Security — steady enough to fund a plan. Irregular or speculative income will not qualify.
- Debt within the caps. Your noncontingent, liquidated secured debts must be under $1,580,125, and your noncontingent, liquidated unsecured debts under $526,700. These figures took effect April 1, 2025, and apply through March 31, 2028. Debts where liability has not been determined or that depend on a future event generally do not count.4Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor
- Credit counseling. You must complete an individual or group credit counseling briefing from an approved nonprofit agency within 180 days before filing. It can be done by phone or online. Without the certificate, the court will not accept the petition.5Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor
If your debts exceed the caps, Chapter 11 may be an alternative, though it is more complex and expensive.
What It Costs to File
The federal court filing fee for a Chapter 13 petition is $313. Installment payments are allowed if you cannot pay upfront. Fee waivers exist but are far more common in Chapter 7.
Attorney fees are the larger expense. Many bankruptcy courts set “no-look” fee amounts — a pre-approved fee the court considers reasonable without itemized billing. These vary by district but commonly run from roughly $2,500 to $5,000. In Chapter 13, attorney fees can usually be folded into the plan itself, so you do not need the full amount before filing. If foreclosure is imminent and you plan to pursue lien stripping, a professional appraisal to establish current value may also be necessary, generally running a few hundred to over a thousand dollars depending on the property.
What Happens If the Case Is Dismissed
A Chapter 13 case can be dismissed for missed plan payments, missing required documents, or failing to attend the meeting of creditors. When a case is dismissed, the automatic stay evaporates. Every creditor held at bay during the case, including your mortgage lender, can immediately resume collection. The foreclosure picks up where it left off, and payments you made to the trustee toward the arrearage do not cure the default; depending on timing, they may be returned to you or distributed to creditors.
Dismissal also triggers the repeat-filer penalties above. A second filing within a year gets a 30-day stay, and a third gets none. Courts are particularly skeptical of a second filing when the first was dismissed for nonpayment, so the path back gets considerably narrower. The best protection against dismissal is filing only when the budget genuinely works — when current mortgage, plan payment, and living expenses fit inside actual income, not a hopeful projection of it.