Can I still keep my house if I file Chapter 7 or Chapter 13 Bankruptcy?

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If you're facing foreclosure and wondering, “Will I be able to keep my home in bankruptcy?”, there may be options for you. Filing for a Chapter 7 Bankruptcy can possibly delay your foreclosure for a few months. A Chapter 13 Bankruptcy filing may even assist in saving your home altogether.

Reaffirmation Agreement

In bankruptcy, a contract signed between the lender and the debtor.

• Reaffirms the personal liability for the debt.
• Must be entered into before the Discharge in Bankruptcy is filed.
• Must be approved by the court.

Pros of Reaffirmation Agreement

• Usually to lenders advantage because it keeps you binded to the debt.
• You have 60 days after document is signed to revoke.

Loan Modification

• Permanent change in your mortgage loan terms.
• Allows for the reinstatement of the loan under the new terms.
• New terms include a new mortgage you can now afford.

FDIC Sponsored Loan Modification Program

Homeowner Affordability and Stability Plan

• Helps borrowers who cannot make their payments due to insufficient income.
• Provides options for borrowers who are up-to-date on their payments, but can't refinance because of a substantial decrease in the value of their home.
• No fees for borrowers through this program.

Can I Keep My Home in Bankruptcy?

When you're asking yourself, “Can I keep my home in bankruptcy?”, keep a few things in mind.

Order of Relief

When you file for bankruptcy, an Order for Relief is automatically issued by the bankruptcy court.

• Includes an “automatic stay” ordering all creditors to immediately stop all collection actions and activities.
• Any scheduled foreclosure sales are legally postponed during the pending phase of the bankruptcy.

Chapter 13 Bankruptcy Mortgage

1^st Mortgages & Chapter 13

• Arrearage is paid off over the length of the new repayment plan.
• As long as repayment plan followed, foreclosure is avoided.

2^nd and 3^rd Mortgages & Chapter 13

• Court can “strip off” 2^nd and 3^rd mortgages.
• 2^nd and 3^rd mortgages can be re-categorized as unsecured debt, making them last priority.

Chapter 7 Bankruptcy Mortgage

• Time to Save – During the pending phase, you can live in your home free for up to several months. This gives you time to save money to relocate, or possibly save your home.
• Get Debt Canceled – Chapter 7 Bankruptcy cancels all debt secured by you home. This includes your 1^st mortgage, 2^nd mortgages and home equity loans.

* For more information on bankruptcy, talk to an expert.