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Will I lose my house if I file for bankruptcy?

    Falling behind on your mortgage payments can cause sleepless nights.  If your mortgage company has threatened to file foreclosure you need to act quickly to save your home and money.  A Chapter 13 bankruptcy is
designed to allow you to keep your home while paying the mortgage company your regular monthly payment and by paying a trustee an extra monthly payment to repay your missed mortgage payments.

     Home Ownership and Bankruptcy. If you are behind on your mortgage payments, you will almost certainly lose your house if you file a Chapter 7 bankruptcy. Your mortgage lender will ask the bankruptcy court to lift the automatic stay to begin or resume foreclosure proceedings. In a Chapter 13 bankruptcy, however,  you will not lose your house if you immediately resume making the regular payments called for under your agreement and repay your missed mortgage payments through your trustee plan payments.

    There are other issues that can make your individual case more complicated, such as income tax liens and judgments to name just a few. If you are current on your mortgage payments, you will not lose your house if you file for Chapter 13 bankruptcy, as long as you continue to make your mortgage payments. In Chapter 7 bankruptcy, whether or not you will lose your house depends on the amount of equity you have in the property and the amount of any homestead exemption (which varies state-to-state) to which you are entitled.

    Each person's situation is different, so in order to decide the best alternative you should consult with an attorney to discuss the specific facts of your case.

For a free in office consultation with one of the attorneys at Grossbart, Portney & Rosenberg: call: Phone: 410.837.0590 |
in MD 800.286.0730. (For Maryland residents only).