If you’re behind on your mortgage payments, the idea of losing your home—or your hard-earned low interest rate—can feel overwhelming. Many lenders offer mortgage modifications, but these often come with a catch: a significantly higher interest rate, sometimes jumping to 6% or 7%. The good news? There’s a better solution that protects your financial future and keeps your mortgage affordable: Chapter 13 bankruptcy.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a powerful legal tool that allows you to reorganize your debts and create a manageable repayment plan. Unlike other options, it gives you the opportunity to catch up on missed mortgage payments without sacrificing your low-interest rate or relying on lender approval.
How Chapter 13 Protects Your Low Mortgage Rate
One of the standout benefits of Chapter 13 bankruptcy is that it enables you to keep your existing mortgage terms—including that coveted 3% or 4% interest rate. Here’s how it works:
- Repayment Over Time: Instead of demanding an immediate lump sum to cover missed payments, Chapter 13 gives you up to five years to repay what you owe. For example, if you’re $5,000 behind, you can spread those payments over 60 months, adding roughly $100 a month (including court fees) to your regular mortgage payment.
- No Additional Interest: The past-due amount doesn’t accrue extra interest, saving you thousands compared to other repayment methods.
- No Lender Approval Needed: Unlike mortgage modifications, where lenders can refuse your request, Chapter 13 bankruptcy is a court-approved plan. The lender has no say in whether you’re allowed to use it.
Avoid Foreclosure and Regain Stability
When you file for Chapter 13 bankruptcy, the court issues an automatic stay. This legal protection halts foreclosure proceedings immediately, giving you breathing room to create a repayment plan and secure your home.
Beyond saving your mortgage, Chapter 13 bankruptcy can also:
- Reduce or eliminate unsecured debts like credit card bills and medical expenses.
- Lower your car payment in certain cases.
- Provide a clear and actionable path toward financial recovery.
Why Chapter 13 May Be Right for You
If you’re sitting on a low mortgage rate, losing it to a high-interest modification could cost you tens of thousands of dollars over the life of your loan. Chapter 13 bankruptcy ensures you don’t have to make that sacrifice. Instead, you’ll have a structured plan to catch up on payments while protecting your home and financial future.
Get Help From Experienced Bankruptcy Attorneys
Navigating the Chapter 13 process can feel complex, but you don’t have to do it alone. Our team of experienced bankruptcy attorneys is here to guide you every step of the way. During a free consultation, we’ll analyze your situation, crunch the numbers, and show you exactly how Chapter 13 can work for you.
Take Action Today
Don’t let missed mortgage payments or foreclosure threats jeopardize your future. Call us today at (612) 824-4357 to schedule your free consultation. Let’s explore your options and protect the low mortgage rate you worked so hard to secure.
