What happens to my house after Chapter 7?

Asked By: Xuehong Targownik | Last Updated: 16th April, 2020
Category: business and finance bankruptcy
4.7/5 (252 Views . 19 Votes)
Chapter 7 bankruptcy will discharge any mortgage debt associated with the property. Specifically, you won't be responsible for any portion of the home loan when you surrender the house. A Chapter 7 bankruptcy discharge will wipe out an obligation to pay back a mortgage deficiency.

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Also question is, can I keep my house after filing Chapter 7?

Most Chapter 7 bankruptcy filers can keep a home if they're current on their mortgage payments and they don't have much equity. However, it's likely that a debtor will lose the home in a Chapter 7 bankruptcy if there's significant equity that the trustee can use to pay creditors.

Also Know, what happens to my house in Chapter 7? If You Are Not Current on Mortgage Payments Here's why. When you complete a Chapter 7 bankruptcy, your debts are discharged. This includes your mortgage debt. However, even though you are no liable for your mortgage, the lender still has a lien against the property (Chapter 7 bankruptcy does not get rid of liens).

Additionally, how long can you stay in your house after filing Chapter 7?

Depending upon where you live, you may be able to remain in your home for six months or more after your Chapter 7 bankruptcy has been finalized. Once your bankruptcy is discharged, you will need to find another place to live. However, you may not need to leave your house immediately.

What happens to my mortgage if I file Chapter 7?

A mortgage is a secured debt. Filing a Chapter 7 bankruptcy doesn't wipe out the mortgage lien that allows the lender to foreclose if you fail to pay as agreed. Chapter 7 bankruptcy also doesn't provide a way for you catch up on the overdue payments.

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What happens to mortgage when you file Chapter 7?

Chapter 7 Wipes Out Mortgage Debt, Not Mortgage Liens. A mortgage loan is a secured debt. Even though your Chapter 7 discharge wipes out your obligation to pay back the loan, it doesn't eliminate the mortgage lien. If it did, everyone could file bankruptcy and then own their homes free and clear.

How much equity do I have in my house?

How much equity do I have? You can figure out how much equity you have in your home by subtracting the amount you owe on all loans secured by your house from its appraised value. For example, homeowner Caroline owes $140,000 on a mortgage for her home, which was recently appraised at $400,000.

What assets can you keep in Chapter 7?

Exempt property (items that a debtor may usually keep) can include:
  • Motor vehicles, up to a certain value.
  • Reasonably necessary clothing.
  • Reasonably necessary household goods and furnishings.
  • Household appliances.
  • Jewelry, up to a certain value.
  • Pensions.
  • A portion of equity in the debtor's home.