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chapter 7 bankruptcy keeping home
Long Island Bankruptcy Attorney – Keeping Your Home
Does filing Chapter 7 bankruptcy discharge your mortgage loan?
Facing a lay-off, we may have no other option but to file for Chapter 7. We have a mortgage and second mortgage. When you file chapter 7, does this discharge mortgage debts as well? Then do you give up your home, or keep it, or what?
Well, technically your mortgage is discharged, but then the mortgage holder is free to repossess the collateral (foreclose). Usually this is not the route taken in Ch 7.
If you want to surrender the home back to the mortgage holder, you can elect “surrender” on your Statement of Intentions. The mortgage holder gets the house back, and any deficiency that remains after they sell it (the difference between what you owe and what they can sell it for) is discharged in bankruptcy.
If you do NOT want to surrender your home, you can reaffirm the mortgage – IF your payments are current on the day that you file and you are able to keep making the payments. Then you continue to make the payments and continue to live there as before.
If you do NOT want to surrender your home but you ARE behind on payments, usually Ch 13 is the only option. In Ch 13 you must keep making your regular mortgage payments and you have 3-5 years to catch up on any arrears you currently have.
There is no way that you can have your mortgage discharged and still keep living in the house. If you want to continue to buy it, you need – one way or another – to keep making the payments on it.
Bankruptcy is a legally declared inability of individuals or companies to deal with their debts. A declared state of bankruptcy can be applied not only by creditors in an effort to get what they deserve, but also by the insolvent person or organization. If difficult to repay debts, declaring bankruptcy may be the right solution to debt problems.
Out of six basic types under Bankruptcy Code, Chapter 7 is a  "liquidationism" nonexempt assets to pay its debts. In a court monitoring procedure, a court appoints a trustee that liquid assets not exempt from the estate of the debtor and making distributions to creditors. The Bankruptcy Code allows the debtor to retain certain exempt property; but a trustee will liquidate the remaining assets of the debtor.
According to the amendments to the Bankruptcy Code enacted in the prevention of Bankruptcy Abuse and Consumer Protection Act of 2005, if the debtor's income is above certain thresholds, the debtor May are not eligible for Chapter 7 relief. Filing a petition under chapter 7 automatically stays most collection actions against the debtor or the debtor's assets, but potential debtors should realize that the filing of a petition under Chapter 7 could lead to loss of property.
After Chapter 7 bankruptcy, you no longer owe money on credit cards, unsecured loans, hospital unpaid medical expenses and utilities and rent arrears. But the debts, as state and federal taxes (unless they are over three years), maintenance required by law, alimony, government-backed student loans, debts due to fraud, fines, penalties and debts because of injury voluntarily to the other person or property are not eliminated by Chapter 7 bankruptcy.
Just months after that the complaint is filed, in most cases, Chapter 7, the individual debtor receives a discharge that releases the debtor from liability Personal certain dischargeable debts. Thus, bankruptcy Chapter 7 is designed to give the debtor a fresh start and a chance to live with financial management healthy.
Finance: Bankruptcy
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