Mortgage Troubles and Bankruptcy

: Chris Lee Law Firm

  Filed under: Foreclosures

Dealing with mortgage debt is a scary time, especially once the threat of foreclosure becomes real. For many families struggling to maintain their house payment and other debts, filing for bankruptcy may be a good solution.

Chapter 13

Mortgage debts are best resolved in Chapter 13 bankruptcy. The reason is that mortgages are secured debts, meaning the loan is secured against an asset. The assetĀ  can be seized and liquidated by the lender in the event of default on the loan. ThisĀ  means that in order to keep the asset (i.e. the home) you must maintain payments. Unlike Chapter 7, filing for Chapter 13 allows you to develop a payment plan to resolve your missed mortgage payments and get caught up.

In some cases, Chapter 13 can even help you resolve second mortgage debts. However, there are some conditions for this to be possible. Typically, the home must valued less than what is currently owed on a first mortgage. Also, the second mortgage debt must be unsecured, meaning it does not possess the right to liquidate the property. In this case, the second mortgage debt would be stripped off and treated as any other unsecured debt, like credit cards.

The foreclosure process can be tricky and filing for bankruptcy isn’t for everyone. If you are considering filing for Chapter 13 to resolve your mortgage debts, it is best to consult with a Dallas bankruptcy attorney about your situation.


Are you a candidate for bankruptcy?
Would you like to find out if bankruptcy is the right option for you? Try our Free Online Bankruptcy Evaluation. 4 easy steps to see if bankruptcy could be the right option for you!
  • Step 1
  • Step 2
  • Step 3
  • Step 4
Please Select Each Box That Applies To You
Creditor Harassment
Loss of Income
Foreclosure
Disability or Illness
Current Expenses
Auto Loans
Credit Cards
Medical Bills
Payday Loans
Do you have any additional information you would like to share?
Contact Information