How will a bankruptcy affect my mortgage? 26 Answers as of June 17, 2011

My wife and I have been paying our home mortgage for 20 years and only have 10 years left. What will happen to the mortgage after I declare bankruptcy?

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The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
That depends in part on which chapter you file and what you want to do with your mortgage. The debt you owe on the mortgage will be discharged in your bankruptcy case, but the lien will remain against your property. So, as long as you maintain your contractually due payments and honor the other provisions, they will not have the right to foreclose.
Answer Applies to: California
Replied: 6/17/2011
Jackson White, PC
Jackson White, PC | Spencer Hale
When a mortgage company sees a bankruptcy, they usually stop reporting payments to the credit agencies. You can usually get them to report by reaffirming the loan (not necessarily recommended). Regardless of whether you reaffirm the mortgage you will still be able to continue making payments on the account and be mortgage free in ten years. Congratulations.
Answer Applies to: Arizona
Replied: 6/17/2011
Rosenberg & Press
Rosenberg & Press | Max L. Rosenberg
The mortgage will technically be discharged unless you reaffirm it. You reaffirm by signing an agreement. Otherwise, if you were to abandon the house, you would owe no deficiency. If you do not reaffirm, but continue to pay, your mortgage will simply continue as before. However it may be more difficult to obtain a modification. It may be easier on the other hand to obtain an Obama HAMP plan modification. I often feel that it is a bad idea to file reaffirmation agreements unless entirely necessary.
Answer Applies to: Connecticut
Replied: 6/17/2011
Law Office of Maureen O' Malley
Law Office of Maureen O' Malley | Maureen O'Malley
It depends on how much equity you have in the house and how much you can exempt. If you can't exempt all the equity and you want to keep the house, you'll need to file a Ch. 13.
Answer Applies to: Virginia
Replied: 6/17/2011
Lakelaw - Loop Bankruptcy
Lakelaw - Loop Bankruptcy | David Leibowitz
If you are paying your mortgage normally, you'll be able to continue paying your mortgage normally even after bankruptcy.
Answer Applies to: Illinois
Replied: 6/17/2011
    Daniel Hoarfrost, Attorney at Law
    Daniel Hoarfrost, Attorney at Law | Daniel Hoarfrost
    Nothing. Secured debts remain a lien on property, so if you want to keep the property, you have to continue to pay the mortgage.
    Answer Applies to: Oregon
    Replied: 6/17/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Generally secured debts such as mortgages and car loans are unaffected by bankruptcy.
    Answer Applies to: California
    Replied: 6/17/2011
    Law Office of Asaph Abrams
    Law Office of Asaph Abrams | Asaph Abrams
    Keep on paying it and pay off your home, however, your attorney must assess the amount of equity in the home, which impacts upon preservation of assets in chapter 7 or payment totals in chapter 13.
    Answer Applies to: California
    Replied: 6/17/2011
    Mercado & Hartung, PLLC
    Mercado & Hartung, PLLC | Christopher J. Mercado
    You can reaffirm your mortgage even if you file BK.
    Answer Applies to: Washington
    Replied: 6/17/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Nothing, just keep paying it.
    Answer Applies to: California
    Replied: 6/17/2011
    Burnham & Associates
    Burnham & Associates | Stephanie K. Burnham
    What happens will depend on you. If you continue to make payments on your mortgage then the mortgage company will have no reason to foreclose. Hopefully you have equity in your home, but the equity is not so large that your exemptions will not be enough to protect all of the equity. If your exemptions are large enough then there is no reason you should not be able to keep your home. If your exemptions are not large enough then you may have to make a "deal" with your Bankruptcy Trustee to purchase back some of your equity.
    Answer Applies to: New Hampshire
    Replied: 6/17/2011
    Law Offices of Steven A. Wolvek
    Law Offices of Steven A. Wolvek | Steven A. Wolvek
    This question depends whether or not you are current with the obligation and whether or not you desire to keep the property. So long as your current with your payments to the lender the bankruptcy should not have any impact on your loan.
    Answer Applies to: California
    Replied: 6/17/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    If you want to keep the mortgage, you can "reaffirm" it through the bankruptcy and continue to pay it as you have. You will only be able to reaffirm it if the equity you have in the home is protected by applicable bankruptcy exemptions.
    Answer Applies to: Indiana
    Replied: 6/17/2011
    Breckenridge and Walton
    Breckenridge and Walton | Alan D. Walton
    Technically, your legal obligation to pay the lender is discharged, BUT the lender's right to take your house remains. As long as you continue to pay as agreed, the lender cannot take your home. Should you stop paying sometime after the bankruptcy, the lender cannot sue you for a deficiency, it is limited to foreclosing on the home.
    Answer Applies to: Michigan
    Replied: 6/17/2011
    Law Office of J. Thomas Black, P.C.
    Law Office of J. Thomas Black, P.C. | J. Thomas Black
    A bankruptcy does not necessarily affect your mortgage. The actual lien against the property remains, and will "ride through" the bankruptcy unaffected. So to keep the property, you will need to continue to pay the mortgage. If you file a Chapter 7 bankruptcy, the debt that is secured by the mortgage is discharged or cancelled. You may or may not wish to enter into a "Reaffirmation Agreement" whereby you agree to be personally liable for the debt after the bankruptcy. Most mortgage companies don't care whether or not you reaffirm their debt, so long as you continue to pay. However, many of my clients find that it is easier to deal with their mortgage company after the bankruptcy if they reaffirm their mortgage debt. The mortgage companies are concerned that they will violate the automatic stay or the discharge injunction if they send you bills or contact you about the mortgage, unless you reaffirm. Many will not report your timely payments to the credit bureaus, or work with you concerning the loan, if you do not reaffirm. That being said, I would not advise a client to reaffirm a mortgage debt that is "underwater," i.e. if the house is worth less than what they owe. In your circumstances, you likely have significant equity in your house, such that you could sell it if you had to, and pay off the mortgage and have money left over.
    Answer Applies to: Texas
    Replied: 6/17/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    As long as you can keep paying your mortgage, you can generally keep your house. You will need to look into whether or not you have so much equity in your house, that there is a problem with how much you can exempt, so I would suggest that you consult with a bankruptcy attorney to see exactly what options are open for you and what is the best decision for you.
    Answer Applies to: Michigan
    Replied: 6/17/2011
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    Your problem is not your mortgage, the problem is your house. Each state has its own rules on whether you can file bankruptcy and keep your house. Some states have great protection, some don't. Some states, like Virginia where I am, give much better protection to married couples. You really need to talk to a good bankruptcy lawyer, and soon.
    Answer Applies to: Virginia
    Replied: 6/16/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Simply keep paying it and if can protect equity in home no problem.
    Answer Applies to: California
    Replied: 6/16/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    You are no longer legally obligated to pay the mortgage. However the lien of the mortgage holder remains and if you do not continue to make the payments, they can foreclose. If you are current on the loan when you file and stay current, most mortgage holders will allow you to continue making payments and when paid in full, will release the mortgage.
    Answer Applies to: California
    Replied: 6/16/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Maybe nothing at all. There is no way to know without a lawyer seeing all your financial information.
    Answer Applies to: Georgia
    Replied: 6/16/2011
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