The Power of Chapter 13 Cure
Chapter 13 allows you to spread arrears over a 3-5 year plan while making current payments. The automatic stay stops all collection immediately. The creditor must accept the plan if it meets statutory requirements.
Curing Mortgage Arrears
Under 11 U.S.C. 1322(b)(5), you cure mortgage arrears through your plan while maintaining regular payments. At completion, the mortgage is fully current.
Curing Auto Loan Defaults
Chapter 13 cures auto defaults and may reduce the balance to the car's value if the loan is more than 910 days old (cramdown under 11 U.S.C. 1325(a)).
Frequently Asked Questions
Can I cure in Chapter 7?
No. Chapter 7 does not provide a cure mechanism. Only Chapter 13 allows you to cure arrears over time while keeping property.
How much will my payment be?
Based on income, expenses, and debts. The means test helps determine plan length (3 or 5 years). Many are surprised at how affordable it is.
What if I fall behind on plan payments?
You can modify the plan. If dismissal occurs, creditors resume collection where they left off. Communication with your attorney is critical.
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