Bankruptcy & Foreclosure: A Guide for New England Homeowners
Facing mortgage delinquency or pre-foreclosure is incredibly stressful, but you are not alone. In 2025, bankruptcy filings have risen by 15% as more homeowners in Massachusetts and New Hampshire seek ways to save their homes.
How Bankruptcy Stops Foreclosure
The moment you file for bankruptcy, an “Automatic Stay” goes into effect. This is a federal injunction that legally requires lenders to stop all foreclosure proceedings and home auctions immediately.
The Two Primary Options
Chapter 13 (Reorganization): The most common choice for keeping a home. It allows you to create a 3–5 year plan to pay back mortgage arrears while keeping up with current payments.
Chapter 7 (Liquidation): Primarily used to wipe out unsecured debt (like credit cards). While it stops an auction temporarily, it is riskier for homeowners because a trustee may sell the property if the equity exceeds state/federal exemptions.
Pros & Cons of Chapter 13
| Pros | Cons |
| Saves Your Home: Catch up on payments over time. | High Commitment: Must have steady income for 5 years. |
| Automatic Stay: Immediate relief from auctions. | Costly: Attorney fees and filing fees total $3,000+. |
| Debt Protection: Creditors cannot pursue you during the plan. | Credit Impact: Remains on your report for 7 years. |
The Chapter 13 Process at a Glance
Preparation: Complete mandatory credit counseling and gather financial records.
Filing: Submit the petition and a $313 fee to the U.S. Bankruptcy Court to trigger the stay.
The Plan: Work with an attorney to propose a 3–5 year repayment schedule.
Meetings: Attend a “341 meeting” with a trustee and a confirmation hearing with a judge.
Completion: After all payments are made, remaining dischargeable debts are wiped clean.
Is Bankruptcy Right for You?
Bankruptcy is a powerful tool, but it isn’t the only one. If you cannot afford the legal fees or the long-term payment plan, other options exist:
Loan Modifications: Restructuring your mortgage directly with the lender.
Equity Access: Programs like our Direct Cash Plus can help you tap into home equity to find stability without a court filing.
Contact Us Today.
Call 603-691-1364 or email us at admin@unlockedhomeproject.com.
Please note that while Unlocked Home Project: Relief Division is dedicated to assisting clients in navigating foreclosure prevention solutions, we are not attorneys, and the information provided in this article does not constitute legal advice. The content is for informational purposes only and should not be relied upon as a substitute for professional legal, financial, or tax advice. Foreclosure laws and mortgage relief options vary by state and individual circumstances, and outcomes depend on specific lender policies and borrower eligibility. UHP assumes no liability for actions taken based on the information provided herein.
