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What 'Curing Arrears' Means
Arrears are the payments you have already missed on a secured loan. To 'cure' them is to bring the loan current. In Chapter 13, you do this by folding the entire past-due balance into your repayment plan and paying it off in installments over the three-to-five-year term, while at the same time resuming your normal monthly mortgage payments going forward (uscourts.gov). By the time the plan ends, the missed payments are fully repaid and the mortgage is current, so you keep the home.
Stopping a Foreclosure Sale
Filing Chapter 13 triggers the automatic stay under §362, which immediately halts a pending foreclosure sale, along with repossessions, garnishments, and collection efforts (uscourts.gov). For a homeowner whose property is days from auction, this is the most urgent benefit of filing. The stay buys the time needed to put a cure plan in place. A lender can ask the court for relief from the stay if you fail to keep current on ongoing payments, so staying on schedule after filing is essential.
Why Chapter 7 Cannot Save the House the Same Way
Chapter 7 can discharge your personal liability on debts, but it provides no mechanism to cure arrears. If you are behind on your mortgage and file Chapter 7, the discharge wipes out your obligation to pay any deficiency, but it does nothing to stop the lender from eventually foreclosing on the collateral once the case ends (uscourts.gov). To keep a home you are behind on, the structured catch-up of Chapter 13 is the tool the Code provides. This is one of the clearest dividing lines between the two chapters.
Car Loans and Other Secured Debt
The same cure mechanism applies to other secured loans you want to keep, such as a financed vehicle. Past-due car payments can be cured through the plan while you resume regular payments, allowing you to keep the car and avoid repossession (uscourts.gov). Plans can also address how certain secured claims are paid over the life of the case, subject to the Code's rules. The common thread is that Chapter 13 lets you protect collateral you cannot afford to lose by giving you supervised time to catch up.
Staying Current Is the Catch
Curing arrears only works if you make both the arrears installments inside the plan and your ongoing regular mortgage or car payments on time. Falling behind again can prompt the lender to seek relief from the automatic stay, which could clear the way for foreclosure or repossession to resume. Whether Chapter 13 is the right approach for your situation depends on your income and the specifics of your loans. People's Justice is not a law firm and does not provide legal advice; we connect you with licensed attorneys, and we are not a government agency.
Resuming Regular Payments Alongside the Cure
It helps to picture the two payment streams that run in parallel during a mortgage cure. The first stream is your ordinary, ongoing monthly mortgage payment, which you resume going forward so the loan does not fall further behind. The second stream is the arrears installment built into your Chapter 13 plan, paid through the trustee, that chips away at the past-due balance over the three-to-five-year term (uscourts.gov). Keeping both current is what allows you to emerge from the case with the mortgage fully reinstated and the home intact. If either stream lapses, the cure can unravel.
Why Income Matters for a Cure
Because Chapter 13 is funded entirely from your income, the cure only works if your budget can absorb both the ongoing payment and the arrears installment on top of your other plan obligations. That is why Chapter 13 is described as the 'wage earner's plan' — it is built for people with regular income who fell behind during a temporary hardship and now have the means to catch up over time (uscourts.gov). If your income cannot support the combined payments, an attorney can help you evaluate whether a different plan structure, a loan modification outside bankruptcy, or another chapter better fits your situation.
The Stay Is Powerful but Not Permanent
The automatic stay is one of the most powerful protections in the Bankruptcy Code, but it is not unconditional. A secured lender can file a motion for relief from the stay, and courts can grant it where the debtor fails to maintain ongoing payments or where the collateral is not adequately protected (uscourts.gov). The takeaway is practical rather than alarming: the stay gives you breathing room and a structured path to keep your home, but that protection is sustained by your performance under the plan. Whether a cure is realistic for your loan is a question to work through with a licensed attorney. People's Justice is not a law firm and does not provide legal advice; we connect you with licensed attorneys.
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Related Guides
- How the Chapter 13 Plan WorksThe Chapter 13 plan is a single court-supervised repayment schedule that runs three years for below-median filers and five years for above-median filers. You pay a Chapter 13 trustee monthly; the trustee distributes funds to creditors by priority. Plan payments start within about 30 days of filing, and the plan binds creditors once the judge confirms it (uscourts.gov).
- Chapter 7 vs Chapter 13Chapter 7 is a liquidation that discharges most unsecured debt in about three months but cannot cure arrears or protect non-exempt assets. Chapter 13 is a three-to-five-year reorganization that lets you keep a home or car you are behind on and shield non-exempt property — at the cost of years of payments. Above-median income on the means test can make Chapter 7 unavailable and push you to Chapter 13 (uscourts.gov; justice.gov/ust/means-testing).
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