Can I keep my house after bankruptcy?

The short answer is yes, but you must be able to make the payments.  In general, a Chapter 7 bankruptcy is not going to order a debtor to move out of their home.  The bankruptcy is not going to remove a debtor’s name from title to their house.  The only effect the bankruptcy will have is to discharge the debtor’s personal liability to repay the loan.  The bank (or lender) retains the lien (a.k.a. the deed of trust) against the property.  If the debtor does not or cannot make the payments, the bank will foreclose.  If you have late mortgage payments at the time you file a Chapter 7 bankruptcy, you will still have to come current on the payments either by paying the past-due amounts (the “arrearages”) or by negotiating a loan modification with the lender.

In Chapter 13, if you want to keep your home and you have late mortgage payments, you propose a Chapter 13 repayment plan that pays off the late mortgage payments over 36 or 60 months.  During this time, you also make the monthly mortgage payment.  Depending on which district you file in (i.e., the Eastern District of California), will determine whether you pay your monthly mortgage payment directly or whether you pay it though your Chapter 13 plan.

Modesto bankruptcy attorney Brian Haddix can explain and advise you as to what option is best for you.

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