Falling behind on mortgage or car payments can leave you worried about losing the home or vehicle your family depends on. For Houston residents facing foreclosure or repossession, Chapter 13 bankruptcy may provide time to catch up on overdue payments and protect important property.
How can Chapter 13 pause foreclosure or repossession?
For most filers, Chapter 13 triggers the automatic stay, a bankruptcy protection that pauses most debt collection efforts. If you had a bankruptcy case dismissed within the past year, special rules may limit when or how long the stay applies. This protection can stop a foreclosure already in progress or a vehicle repossession while your bankruptcy case moves forward.
Timing matters. If your home has already been sold at foreclosure before you file, Chapter 13 generally cannot reverse that sale. A lender or creditor may also ask the bankruptcy court for permission to continue collection.
How can a repayment plan help you catch up?
Chapter 13 allows you to propose a plan for repaying eligible debts that usually lasts three to five years. To qualify for Chapter 13, you must be an individual with regular income, and any secured or unsecured debts you have must fall below federal limits. The plan can include past-due mortgage amounts and other eligible debts.
Depending on your situation, you may be able to:
- Catch up on past-due mortgage payments
- Address certain amounts owed on an auto loan
- Make plan payments to a bankruptcy trustee, who sends money to creditors
To keep your home while catching up on the overdue mortgage balance, you must maintain the ongoing payments required under the plan. Keeping a vehicle can also depend on how the repayment plan handles the loan and whether you make required payments.
What should you check when your home or car is at risk?
Promptly reviewing repossession or lender notices, recent loan statements and any scheduled foreclosure sale date can help you understand how far behind you are and which options may still be available.
Understand your options before more payments fall behind
The earlier you understand where your mortgage or auto loan stands, the more clearly you can see whether Chapter 13 may help. An attorney can review your payment history, any scheduled foreclosure sale, the status of your auto loan and whether you qualify for Chapter 13, then explain how a repayment plan could apply to your situation. That guidance can clarify the next steps before your options become more limited.