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Can Bankruptcy Save My House?

Can Bankruptcy Save My House?

Chapter 13 for Foreclosure help from Kain & Henehan - St. Cloud & Eagan, MN

When you fall on hard times, it can feel like the world is closing in on you. One of the biggest concerns many homeowners is is can bankruptcy save my house? If so, what do I do? Worrying about losing your home is a stressful on so many levels.  What about the money you’ve already invested? Can we afford to move?  What will people say?

The good news is that there are ways bankruptcy can help you keep your home and avoid foreclosure. The right type of personal bankruptcy can not only prevent foreclosure but in some cases also stop the foreclosure process if it has begun. If you are wondering if “bankruptcy can save my house,” here is what you need to know about keeping your home by filing bankruptcy.

Chapter 13 Bankruptcy

Chapter 13 is a type of bankruptcy that allows you to create a plan to repay all or part of your debt over a 3- to 5-year period. This is often what homeowners select if they want to keep  the house because this type of bankruptcy is very similar to debt consolidation programs, but with all the protections given by the federal courts. The court will appoint a trustee to oversee your payments and make sure you stay on track. To qualify for chapter 13, you must have a regular source of income (such as a job) and must be able to show that you have enough disposable income left over to make monthly payments. Don’t worry. A qualified bankruptcy attorney will help you determine this.

Most people do not pay their debt in full, they pay what they can afford to pay, so chapter 13 bankruptcy could help you avoid foreclosure.  Chapter 13 does not stop a foreclosure process that has already begun so filing before the bank has begun that process is important. Again, if you have questions about how this type of bankruptcy can save my house,  it’s important to discuss your specific case with an experienced bankruptcy lawyer.

Once Chapter 13 Filed, the Bank Cannot Begin a Foreclosure

Filing a chapter 13 bankruptcy can prevent a foreclosure from being filed by the bank.  It also gives you time to catch up on your payments. It can sometimes help you get a lower interest rate on your mortgage. Keep in mind that you must be able to show that you have enough income left over every month to pay your bills, including your mortgage. Again an experienced bankruptcy lawyer can help you figure this out.

With Kain + Henehan, the chapter 13 plan is developed by you and your attorney at Kain + Henehan.  The payment plan is not developed by the bankruptcy court Judge or your creditors. It is developed with your particular circumstances in mind.  At Kain + Henehan, we know if the payment plan doesn’t work for you, it won’t work for anyone else either!  Sometimes your bank or mortgage lender may even agree to lower your interest rate.

Continue Paying Off Your Mortgage 

By continuing to pay off your mortgage during the time period will of course allow you to keep your home.  If you have equity in your home, you’ll likely retain it.  Again your lawyer should help you through the process and at bankruptcy court.

Other Options to Stop Foreclosure

Sometimes you may be successful in other options to avoid foreclosure. For instance, you can try to negotiate with your lender, negotiate a different payment plan, or sell the house.

Negotiate with the lender -Depending on the circumstances that brought you to this extreme situation, the lender may be sympathetic and be willing to work with you. They might be open to letting you make smaller payments or different time frame.

Set up a payment plan  – The lender may be willing to let you catch up on missed payments over time. It is may be worth trying to work out a payment plan with your lender.

Sell the house – If you don’t want to keep the house, you can sell it and put the money towards your mortgage. Perhaps the sale will be large enough to pay off the entire mortgage as well as second mortgage debt. Obviously you selling avoids foreclosure.

Get Assistance from a St. Cloud Bankruptcy Attorney

If you have not been successful in negotiating with your lender or do not want to sell your home, it is time to discuss Chapter 13 bankruptcy.  It’s important to explore this option before your bank has started foreclosure proceedings. If your goal is to have “bankruptcy save my house,” with the proper planning, you’ll be able to climb out of debt and regain financial stability. For many families, bankruptcy is a key part of the process.

Bill Kain and Margaret Henehan of Kain+Henehan are caring attorneys who understand that folks do not come to consider bankruptcy easily. For example they know that often certain circumstances like an unexpected illness resulting in huge medical bills or a divorce or job loss can have a devastating effect on people’s ability to pay their bills.

They are ready and available to help you explore the bankruptcy process and can help you get back to a positive financial place. If you are looking for a knowledgeable and empathetic bankruptcy attorney, Kain + Henehan have the ability to properly guide you. We serve the St. Cloud and Twin Cities areas, and in general have clients throughout Minnesota. We can answer any questions that you might have. Contact us by calling (612) 438-8006 or filling out the online form

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