Can I Keep My House 2017-09-06T16:02:08+00:00


Some people believe you lose all your property when you file for bankruptcy, which is discussed in A Quick Overview of the Difference between Chapter 7, 11, and 13.  That is typically not the case in all honesty.  Those who file either a Chapter 7 or Chapter 13 end up in being able to keep their homes. Of course, this is assuming they want to keep their home and keep making their mortgage payments (if applicable). There are, however, a few conditions for those who end up filing a Chapter 7 Bankruptcy.

Currently, there are only a few ways you can guarantee being able to keep your house. One of them, bankruptcy or not, is to make your monthly mortgage payments on time and stay that way. If you are already a few months behind on your mortgage and have been threatened with a foreclosure, you will need to bring yourself up-to-date on your payments and continue to make your payments on time. If you have received a notice of a foreclosure and can’t get the mortgage caught up on your own, you will need to consult with an attorney right away as Bankruptcy can stop a foreclosure dead in its tracks.  Unfortunately, a Chapter 7 would only be a very small bandage on a very big problem if it is your goal to save your home. The reason is because only a Chapter 13 is designed to help you get caught up on your payments. This is a good example as to why someone would want to file a Chapter 13 even though they qualify for a Chapter 7.

If you find yourself confused and are asking “Why do I have to pay for my house if I want to keep it even though I’ve filed for bankruptcy?” The reason for this is because your home loan is secured or “attached” to your house which the reason why your lender is allowed to foreclose on your house if you are not paying on the loan. Thus you must continue to pay on your home loan if you want to keep your house.

On the flipside, we have represented clients who wanted to voluntarily let their house go into foreclosure for a number of reasons. A common reason is they got stuck with a loan that has a very high mortgage payment and or a very high interest rate.  Another reason is that the house needs huge structural repairs and our clients are unable to afford the repairs and no one will buy the house in its current condition. The circumstances and factors that motivate someone to file are complicated and unique but often go ahead and take the opportunity their bankruptcy affords them to go ahead and get away from a money pit of a house mortgage.

To find out if you are a good candidate for bankruptcy, call RS LAW today and what that means for you!