Suffolk County
Chapter 13 Bankruptcy Lawyer

Once a Suffolk judgment and a sale date are set, a lump-sum reinstatement is often the only thing the lender will accept, money most families do not have. Chapter 13 changes that. The automatic stay halts the scheduled auction the instant the petition is filed, and the plan then lets you cure the entire arrears over its full term while you resume the regular payment going forward, so the lender is made whole on the court’s timeline instead of all at once. The chapter can also strip a wholly unsecured junior lien: a second mortgage or a home equity line with no equity left underneath it can be treated as unsecured and largely discharged. And the co-debtor stay extends the protection to anyone who co-signed a consumer debt with you.

In a “traditional” or “catch-up” plan, the client resumes post-petition mortgage payments and, in addition, makes monthly Chapter 13 plan payments on pre-petition arrears and debt to the court-appointed trustee. The combination keeps the client from falling further behind while catching up on the arrears that existed before filing. Secured debt such as mortgage arrears, and priority debt such as taxes, must be paid in full over the plan, while unsecured credit card debt can be paid at a percentage on the dollar.

Because many foreclosures involve mortgage arrears of many years that are too high to cure over a 60-month plan, seeking a mortgage loan modification through a loss mitigation program has become a standard approach. Loss mitigation is the pursuit of a modification by the debtor, overseen and encouraged by the Bankruptcy Court, during which the debtor pays the hypothetical modified payment under the plan to the trustee to demonstrate an ability to sustain it. The traditional plan is generally safer, since its success depends on payments rather than on approval, while loss mitigation is less expensive month to month but depends on the lender approving the modification.

Chapter 7 erases qualifying unsecured debt in a matter of months and is the right call when you are current on the house or do not own one and simply need a clean break. It cannot force a lender to accept catch-up payments, which is the gap Chapter 13 bankruptcy fills. If you are behind on a Suffolk mortgage and want to keep the home, if you earn too much to pass the Chapter 7 means test, or if you have non-exempt property a liquidation would put at risk, the repayment plan is the tool that protects it.

If you are weighing the two chapters more broadly, the bankruptcy lawyer in Suffolk County overview walks through both, and we tell you the honest answer at the free consultation rather than steering you to the larger fee. Where a client can qualify for both and needs both, a Chapter 7 can be filed first to discharge unsecured debt, followed by a Chapter 13 to deal with mortgage arrears, a sequence nicknamed a “Chapter 20” that requires careful pivoting of the budget.