Declaring bankruptcy can have a significant impact on your mortgage. When you declare bankruptcy, your assets and debts are evaluated to determine the best way to repay your creditors. In some cases, you may be able to keep your home and continue making mortgage payments as normal. However, this will depend on the type of bankruptcy you file and whether you are able to continue making payments.
If you file for Chapter 7 bankruptcy, your assets will be liquidated to pay off your debts. In this case, you may be required to sell your home and use the proceeds to pay off your mortgage. However, you may be able to keep your home if you are able to make a deal with your lender to continue making payments.
If you file for Chapter 13 bankruptcy, you will work with a trustee to develop a repayment plan that will allow you to keep your home and continue making mortgage payments. The trustee will negotiate with your creditors to reduce your debt and create a plan for repayment. This can help you get back on track with your mortgage payments and avoid foreclosure.
It’s important to note that bankruptcy will have a negative impact on your credit score, and it may be difficult to obtain new credit or loans in the future. It’s important to work with a qualified bankruptcy attorney to understand your options and develop a plan for managing your debts and protecting your assets, including your home and your mortgage.