A Chapter 13 bankruptcy in San Diego lets you pay off the “arrearage” (late, unpaid payments) over the length of a repayment plan usually five years. You will need enough income to at least meet your current mortgage payment at the same time you’re paying off the arrearage. If you make the required payments up to the end of the repayment plan, you’ll avoid foreclosure and keep your home. Chapter 13 may also help you eliminate the payments on your second or third mortgage. That’s because, if your first mortgage is secured by the entire value of your home (which is possible if the home has dropped in value), you may no longer have any equity with which to secure the later mortgages. That allows the Chapter 13 court to detach the second and third mortgages and turns them into unsecured debts. In a Chapter 13, unsecured debt takes last priority and often does not have to be paid back at all.
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