Many people fall behind on their home mortgage, but some people experience the unfortunate event of an accelerated home mortgage. Once people fall behind on their home mortgage some lenders are contractually entitled to accelerated the debt, meaning that the entire balance becomes due. Hence, these people no longer just owe a few missed monthly payments, but the entire balance of their home mortgage. Fortunately, chapter 13 bankruptcy can de-accelerate the debt.
In chapter 13 bankruptcy an individual can cure and reinstate their home mortgage. In practice, this individual will file a chapter 13 bankruptcy plan that proposes to “cure” (repay) late mortgage payments over a reasonable period of time, usually over the course of the 3 to 5 year repayment plan. Once repaid, the mortgage is reinstated as if there were no prepetition default triggering acceleration of the debt. In other words, upon completion of the chapter 13 repayment plan the individual will be current on their home mortgage and only owe monthly mortgage payments, not the entire balance.