Answers

What in the terms of a mortgage would prevent the mortgage from being included in a chapter 7 bankruptcy?

someone told me that there are certain things in the terms of a mortgage that could prevent you from including your house in a chapter 7, but of course they cannot tell me what. i will not be meeting with my lawyer again for a little bit so i can't ask him right now and i'm worried now because i WANT to include my house. all i can find when trying to research this stuff online is how to avoid foreclosure on a house. i don't want to avoid it. i want to get rid of my house. i cannot afford it. so, for anyone out there who knows about this stuff...what would ever prevent me from including my house in my bankruptcy?

Best Answer:

You can include your house in a bankruptcy but that does not mean you can discharge the mortgage debt. You must pay all missed payments over a period of time and all future payments. If you can not do that, the lender will get permission from the bankruptcy court to do a normal foreclosure.

Answers:

foreclosurefish_com - 2008-02-13 06:50:36
You can not include your house in a Chapter 7 bankruptcy. Chapter 7 is only for unsecured debt, like credit cards, store cards, personal loans, and the like. The mortgage is secured by the property, so it would not be dischargeable under Chapter 7. The clause in your mortgage paperwork that keeps it from being included in Chapter 7 cases is that it states the loan is secured by the property. Chapter 7 does not discharge secured debt. So that excludes the mortgage and Chapter 7 from having anything to do with each other. You can include the house in a Chapter 13 bankruptcy, which is a reorganization of the debt with a repayment plan. But if the house is already too expensive, then agreeing to a repayment plan would not make a whole lot of sense. In Chapter 13, your payments might go up, because you have to pay the regular monthly mortgage, as well as a portion of the amount that you are behind. The only real way to get rid of the mortgage is find some way to sell the house or have it be foreclosed on by the bank. The county sheriff sale will eliminate the mortgage lien and transfer ownership of the property. You'll have to deal with a foreclosure on your credit for 7-10 years, though. Hope that helps. ForeclosureFish