Falling behind on mortgage payments can be overwhelming, especially when the risk of foreclosure becomes real. For many homeowners in Chattanooga, Chapter 13 bankruptcy offers a structured way to regain control, catch up on missed payments, and keep their homes. At

Kenneth C. Rannick P.C., we provide legal assistance to individuals and families navigating these difficult financial situations.

Understanding Chapter 13 Bankruptcy

Chapter 13 bankruptcy is often called a “reorganization” bankruptcy. Instead of wiping out debts entirely, it allows individuals with regular income to create a court-approved repayment plan that lasts three to five years. This plan consolidates certain debts into manageable monthly payments based on what the filer can reasonably afford.

For homeowners, Chapter 13 can be especially valuable because it provides tools that directly address mortgage arrears while allowing you to continue making regular mortgage payments going forward.

How Chapter 13 Stops Foreclosure

One of the immediate benefits of filing for Chapter 13 bankruptcy is the automatic stay. This court order goes into effect as soon as the case is filed and temporarily stops foreclosure proceedings, collection calls, and other creditor actions.

The automatic stay gives homeowners breathing room. It pauses foreclosure long enough to propose a repayment plan that includes past-due mortgage payments, creating an opportunity to catch up instead of losing the home.

Catching Up on Missed Mortgage Payments

Under a Chapter 13 repayment plan, missed mortgage payments—also known as arrears—can be spread out over the life of the plan. Rather than paying the full past-due amount all at once, you make monthly plan payments that gradually bring your mortgage current.

At the same time, you continue making your regular mortgage payments going forward. This two-track approach allows many homeowners to stabilize their finances and avoid foreclosure.

Dealing With Fees and Penalties

When mortgage payments fall behind, late fees, penalties, and legal costs can quickly add up. Chapter 13 can help manage these additional charges by incorporating them into the repayment plan. In some cases, certain penalties may be reduced or eliminated, making it easier to catch up without falling further behind.

When Chapter 13 May Be a Good Option

Chapter 13 bankruptcy may be a good fit if you have fallen behind on mortgage payments but now have steady income to support a repayment plan. It can also help if you are facing foreclosure, juggling other debts, or need time to reorganize your finances while keeping your home.

Every financial situation is different, and eligibility depends on several factors, including income, debt limits, and the type of mortgage involved.

Getting Help With Chapter 13 in Chattanooga

Navigating Chapter 13 bankruptcy involves detailed paperwork, strict deadlines, and ongoing obligations. Having legal guidance can help ensure that your repayment plan is properly structured and that your rights as a homeowner are protected.

At Kenneth C. Rannick P.C., we provide legal assistance to the Chattanooga public, helping individuals understand their options and take informed steps toward financial stability.