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If I am filing for bankruptcy do I still have to pay my mortgage?
In general, if you file for bankruptcy and you want to keep
your home, you must continue making your regular mortgage payments. Read on to learn more about what happens if you don’t pay your
mortgage in bankruptcy.
For more information on how bankruptcy affects your mortgage,
see our topic area on Your Home
A bankruptcy discharge is designed to wipe out your personal
liability for most types of debt. However, it doesn’t automatically eliminate
liens from your property. In most cases, a mortgage lender’s lien (and right to
foreclose on your house) survives bankruptcy. This means that if you want to
keep your home, you must pay your mortgage during and after bankruptcy. But if you have a
wholly unsecured second mortgage (or other junior lien), you may be able to get
rid of it in Chapter 13 bankruptcy (discussed below).
If your first mortgage balance exceeds the value of your
home, you can eliminate your second mortgage in Chapter 13 bankruptcy through a
process called lien stripping. If you are stripping a junior mortgage lien from
your home, you don’t have to make payments on it during bankruptcy. But you
still have to continue paying your first mortgage.
To learn more, see Removing
a Second Mortgage in Bankruptcy.
When you file for bankruptcy relief, the automatic
stay prohibits your mortgage lender from foreclosing on your home. But if
you don’t pay your mortgage, your lender has grounds to ask the court to lift
the stay so that it can initiate or continue the foreclosure process. To do
this, the lender will have to file a motion for relief from the stay with the
court. However, unless you can show that you can resume your payments and begin
catching up on your arrears, most courts will grant the lender’s request.
For more information, see When
the Stay Can Be Removed.
by: Baran Bulkat, Attorney
Chapter 7 Bankruptcy
Chapter 13 Bankruptcy
Discharging Debt in Bankruptcy
Should You File Bankruptcy?
Planning for Bankruptcy
Using a Bankruptcy Lawyer
Your Home in Bankruptcy
Your Car in Bankruptcy
The Automatic Stay
The Bankruptcy Trustee
Bankruptcy's Meeting of Creditors
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