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- Embed this noticeNo. Chapter 13 is a repayment plan. The debtor remains in possession. Collection activity is prohibited except through the bk court, so they can't foreclose. The debtor still has to perform the plan and make payments, but the debt owed on an underwater property is reduced to fair market value with the difference typically discharge as unsecured debt either completely or for pennies on the dollar.
Chapter 7 is a different story. The lender will often move to lift the stay to the extent necessary to exercise their security rights, i.e. foreclose the property.