Automatic Stay

• When a person files for Chapter 13, the bankruptcy court issues an automatic stay. A stay postpones a foreclosure sale while the bankruptcy case is pending.
  
  

Motion to Lift the Stay

• A lender can proceed with a foreclosure sale while a Chapter 13 case is still pending if the court grants a lender’s “motion to lift the stay.”
  
  

Previous Bankruptcy Filing

• Filing for Chapter 13 will not prevent a lender from proceeding with a foreclosure if, within the last two years, a debtor’s previous bankruptcy filing resulted in the court lifting the stay so that the lender could proceed with the foreclosure.
  
  

Repayment Plan

• In Chapter 13, a debtor repays creditors in a three- or five-year repayment plan. A lender cannot foreclose on the home if the debtor will repay the mortgage arrearage in the repayment plan.
  
  

Default

• If a debtor fails to make a payment in the plan or does not agree to repay the lender in a Chapter 13 repayment plan, the lender can proceed with the foreclosure.