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Do I have to pay my mortgage if I file Chapter 7?
When you file Chapter 7, you are no longer legally obligated to repay the loan. “Legally obligated” is the key phrase here because Chapter 7 does not get rid of the lien on the property. Your lender still has a right to the property if the debt is not paid. So basically, you don’t have to pay your mortgage.
Can your mortgage company refuse payment?
Your mortgage company may refuse payment from you if they have started the foreclosure process. They may attempt to collect the full amount of arrears that you owe to bring your account up to date. If you go to court, you can force the lender to accept payments and start a payment plan to catch up.
How does Chapter 7 affect your mortgage with an ex?
If your ex filed for Chapter 7, you might have some concerns. Your ex’s bankruptcy will wipe out his liability for the mortgage against the property, but it doesn’t eliminate the mortgage’s lien against the house. The lender can still look to you for payment of the loan during and after his bankruptcy.
How much equity can I have in my home and still file Chapter 7?
Some allow you to protect as little as a few thousand dollars in equity. In another, you can exempt up to $500,000, or even the entire value of the real property. But most states fall between these extremes. You can learn more about exemptions in all 50 states in Bankruptcy Exemptions by State.
Can bank foreclose if your making partial payments?
Partial payments that exceed 30 days late can damage your credit rating and your credit score. A trailing past-due balance rapidly could accrue and lead to foreclosure. Contacting your mortgage lender to discuss short-term repayment plans or a loan modification might help you avoid foreclosure.
Can You Keep your mortgage if you file Chapter 7 bankruptcy?
The bad news is that some homeowners filing for Chapter 7 bankruptcy will lose their homes. In Chapter 13 bankruptcy, you can keep your home and continue with your current mortgage. If you file (and qualify) for Chapter 7 bankruptcy and your home is exempt, you can continue to make your mortgage payments if you want to keep your home.
Do you have to reaffirm your mortgage in Chapter 7?
If you are current on your mortgage payments and file Chapter 7 bankruptcy, you may have been advised by your attorney not to reaffirm your mortgage during the process – or your lender may have refused to reaffirm. Mortgage lenders typically prefer you to reaffirm the debt because it gives them more leverage and options.
Can a second mortgage be removed in Chapter 7 bankruptcy?
Lien stripping is the process of removing junior liens (such as second or third mortgages) from your house if the balance of your first mortgage (or other senior liens) exceeds the value of the property. Lien stripping isn’t available in Chapter 7 bankruptcy.
What happens to your mortgage if you file Chapter 13?
To learn if your home has nonexempt equity, see Chapter 7 Homestead Exemption. Chapter 13 bankruptcy does not affect your home mortgage. You continue to make your mortgage payments during and after the bankruptcy.