Foreclosure is one of the most stressful experiences a homeowner can face. For many individuals in Chapter 13 bankruptcy, the goal is simple: catch up on missed payments and keep the home. But when financial strain continues after filing, even a well-structured case can begin to unravel.
Recently, our office helped a client in exactly that position—facing mounting mortgage arrears and the real risk of losing their home—successfully stabilize their case using New Jersey’s Emergency Assistance program.
This is how it worked, and why it matters.
The Situation: A Chapter 13 Case at Risk
Our client had already taken the important step of filing Chapter 13 bankruptcy. Under 11 U.S.C. § 362, the filing immediately stopped foreclosure proceedings and provided temporary protection.
But Chapter 13 is not just about stopping foreclosure, it’s about fixing the problem.
As explained by the U.S. Courts, the United States Courts provides an overview of the Chapter 13 bankruptcy process, including how debtors repay arrears over time while protecting their assets.
Under 11 U.S.C. § 1322(b)(5), debtors can repay mortgage arrears over time while maintaining ongoing payments. However, that only works if the plan is financially feasible, as required by 11 U.S.C. § 1325(a)(6).
In this case, despite best efforts, the client fell behind again post-petition. The lender moved for relief from the automatic stay, putting the home back at risk.
The Turning Point: Emergency Assistance Approval
At that critical moment, the client was approved for New Jersey Emergency Assistance.
The New Jersey Emergency Assistance program administered by the New Jersey Department of Human Services—is designed to prevent homelessness by providing financial support to individuals facing emergent housing crises, including foreclosure.
Under N.J. Stat. § 44:10-51, assistance may be used to address housing instability and prevent displacement.
New Jersey courts have reinforced this purpose. In Williams v. Department of Human Services, the court recognized that assistance can be used proactively to address delinquent mortgage obligations and prevent homelessness.
For our client, this meant something powerful:
A lump-sum intervention that directly reduced mortgage arrears.
Why Emergency Assistance Works in Chapter 13
From a legal and strategic standpoint, Emergency Assistance can significantly strengthen a Chapter 13 case.
Reduces Arrears Immediately
Instead of spreading arrears over 60 months, EA funds can pay them down upfront, lowering the total plan burden.
Improves Plan Feasibility
Feasibility is one of the most common reasons plans fail. By reducing the amount that must be repaid through the plan, EA makes compliance under 11 U.S.C. § 1325(a)(6) far more realistic.
Resolves Stay Relief Issues
Once arrears are cured or reduced, the lender’s basis for seeking relief from stay often disappears.
Stabilizes the Entire Case
Chapter 13 cases frequently fail due to mortgage issues. Addressing the largest liability often determines whether the case succeeds.
Can You Qualify for Emergency Assistance in New Jersey?
Eligibility is governed by N.J.A.C. 10:90-6.2 and related regulations.
Generally, assistance is available to individuals who:
- Are facing imminent foreclosure or homelessness
- Receive or qualify for certain public benefits
- Can demonstrate financial hardship
The program is intended to be temporary and requires recipients to work toward long-term housing stability.
For additional guidance on foreclosure prevention, the U.S. Department of Housing and Urban Development provides helpful federal foreclosure prevention resources, including options for struggling homeowners.
Courts have also emphasized that Emergency Assistance is not indefinite. In Franklin v. New Jersey Dept. of Human Services, the court highlighted the program’s role as a temporary solution while recipients pursue permanent housing stability.
Does Bankruptcy Affect Your Eligibility?
No—at least not negatively.
Under 11 U.S.C. § 525, government programs cannot deny benefits solely because someone has filed for bankruptcy.
That means filing Chapter 13 does not disqualify you from receiving Emergency Assistance.
For consumer-friendly information on managing mortgage challenges, the Consumer Financial Protection Bureau offers homeowner assistance and foreclosure guidance.
What This Means for Homeowners
This case highlights an important reality that Chapter 13 is not a static process and it can be strengthened with the right tools.
Emergency Assistance is one of those tools. When used properly, it can:
- Prevent foreclosure
- Fix arrears issues
- Make an otherwise unworkable plan succeed
Unfortunately, many people—and even some practitioners—are not aware of how these programs can be integrated into a bankruptcy strategy.
A Strategic Approach Makes the Difference
Successfully using Emergency Assistance in a Chapter 13 case requires coordination:
- Proper disclosure to the Trustee
- Alignment with the confirmed or modified plan
- Accurate accounting of arrears and payments
- Strategic timing in relation to creditor motions
When done correctly, the result can be the difference between dismissal and long-term financial recovery.
Take Action Before It’s Too Late
If you are behind on your mortgage or facing foreclosure—even if you have already filed for bankruptcy—you may still have options.
Programs like Emergency Assistance are designed to prevent the loss of housing, but timing is critical.
If you are struggling with mortgage arrears or a Chapter 13 case, contact Scura, Wigfield, Heyer, Stevens & Cammarota, LLP today.
Our team understands how to integrate bankruptcy strategy with available state assistance programs to protect your home and your future.
