Lately, it seems that personal financial hardships go hand-in-hand with mortgage payments and foreclosure. Many people have gotten into mortgages that they can't handle, which coupled with unemployment has led many people to consider filing for bankruptcy. While filing for bankruptcy is a way to give someone a clean break from their creditors, it can be a scary process for many.
People often wonder if they file for bankruptcy if the bank will take their home. This is a legitimate concern, and it often depends on a few different variables. You can lose your home in a number of different ways, including while in Chapter 7 bankruptcy.
If you stop making payments and ignore requests for payment of a loan modification from the bank, you will likely go into foreclosure and lose your home. Depending on the state, you may still be liable for some of the costs after the bank sells the property. If you are in bankruptcy, the situation can change.
People that file for Chapter 7 bankruptcy can still lose their home. After the court trustee reviews your paperwork, they may determine that your home equity exceeds the amount that can be protected, they may sell your house to pay the creditors. Sometimes filing for bankruptcy can delay the foreclosure process, but many times it is only a delay, not a stop to the process.
There are other ways that people in bankruptcy can lose their homes. It would be wise if you are behind on your mortgage payment or in a situation of financial hardship to speak with a bankruptcy attorney. They will be able to assess your individual situation and guide you through the bankruptcy process.
Source: Fox Business