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Foreclosure Prevention in a Chapter 13 is Achieved by Curing the Arrears on a Mortgage through the Reorganization Plan

Chapter 13 bankruptcy protects someone from foreclosure on their home if they uphold their end of the payment plan.

As far as foreclosure prevention in a Chapter 13, usually what will happen is you will file a plan with what’s called the cleared and maintained provision, meaning you’re going to maintain monthly payments on your mortgage and you’re going to cure the arrears through the plan of re-organization.  So, beginning the month after you file the bankruptcy, you will be resumed your pre-default regular monthly mortgage payments and then, you will make the bankruptcy plan payment which will go to clearing the arrears on the property and the theory is if you make it all the way through 3 to 5 years of your bankruptcy plan, then at that point, you obtain your discharge and your mortgage is current because you’ve been making the payments and the trustee’s paid back the arrears.