Falling behind on mortgage payments can be overwhelming, especially when the risk of foreclosure starts to feel real. For many Colorado homeowners, Chapter 13 bankruptcy offers a structured way to regain control, protect their home, and catch up on missed payments over time. Understanding how this process works can help you decide whether it may be the right option for your situation.

At Law Offices Andrew F. McKenna, P.C., we can provide legal assistance to the Colorado public and help homeowners explore debt relief options designed to protect their financial stability.

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a court-approved repayment plan that allows individuals with regular income to reorganize their debts. Instead of liquidating assets, you make monthly payments to a bankruptcy trustee over three to five years. These payments are then distributed to creditors according to the plan approved by the court.

For homeowners, one of the most important benefits of Chapter 13 is the ability to address mortgage arrears while keeping the home.

How Chapter 13 Helps With Missed Mortgage Payments

When you file for Chapter 13, the court places an automatic stay on most collection actions. This means foreclosure proceedings must stop while your case is active. You can then include your past-due mortgage payments in your repayment plan.

Rather than paying the full arrears immediately, Chapter 13 allows you to spread those missed payments out over the length of the plan. This can make catching up far more manageable while you continue making your regular monthly mortgage payments going forward.

Stopping Foreclosure Through the Automatic Stay

The automatic stay is one of the most powerful tools in bankruptcy. Once your Chapter 13 case is filed, lenders are generally required to pause foreclosure actions. This breathing room gives you time to work out a realistic plan to repay what you owe without losing your home.

Managing Other Debts at the Same Time

Chapter 13 does more than address mortgage arrears. It can also help you reorganize credit card balances, medical bills, personal loans, and other unsecured debts. By rolling multiple obligations into a single monthly payment, many filers find it easier to stay on track financially.

In some cases, unsecured creditors may receive only a portion of what is owed, depending on your income and assets, freeing up funds to focus on keeping your home current.

Staying Current During the Repayment Plan

While Chapter 13 helps you catch up on missed payments, it is essential to remain current on ongoing mortgage obligations. Missing payments during the plan can jeopardize your case and put your home at risk again. Careful budgeting and realistic planning are key parts of a successful Chapter 13 filing.

Is Chapter 13 Right for Colorado Homeowners?

Chapter 13 bankruptcy may be a good fit if you have fallen behind on your mortgage but have enough income to maintain regular payments going forward. It is especially helpful for homeowners who want to avoid foreclosure and need time to repay arrears in a structured way.

Every financial situation is different, and Colorado bankruptcy laws include specific rules and exemptions that can affect your case. Understanding your options before taking action is critical.