Considering Your Mortgage When Converting to a Chapter 7 Bankruptcy
Transcript:
Hi, Matt McArthur, bankruptcy attorney at Clear Counsel Law Group. I had an email sent to me, I'm going to read it here. It says "I have converted from a Chapter 13 to a Chapter 7 and included my mortgage. Will I have to leave the house after it has been discharged?"
I have to make a couple of assumptions here because I don't have quite all of the information. However, the assumption that I'm going to make is that the Chapter 13 case was filed on this individual's behalf, and they originally included the mortgage to try and save the home. However, at some point something happened and they needed to convert to a Chapter 7 and they're now including the mortgage as part of the discharge in the Chapter 7, and they will not be paying on the house moving forward.
There's a very good possibility in this situation that a person who has converted from 13 to a 7 will have to eventually leave their home. Now, there may be situations where you can still keep your home, but it's probably going to depend upon your ability to get back in good standing with the mortgage lender. Whether that mean curing the default or the arrears that are outstanding on the loan, or whether you are able to obtain a loan modification that puts you back in good standing and either rolls in the arrears into the back portion of the mortgage or re-amortizes the loan so that you are currently found to be all caught up on your monthly payments.
With that being said, the Chapter 13 is the best way to be able to ensure that you can keep your home because you force the bank into a repayment plan that allows you to cure the arrears within a plan that's approved by the court, where you're paying back the arrears over a 5 year period, but in a Chapter 7 bankruptcy, you don't have that time involved. It's a 3-4 month process and it's over very quickly. You're probably looking at a shorter timeline to be able to stay in your home in a Chapter 7.
If you're concerned about your ability to keep your home, there may be some methods outside of bankruptcy that would allow you to keep your home, such as the Nevada Home Foreclosure Mediation Program or other like services. If you're trying to keep your home in a post-bankruptcy situation, please come and see me and I'll give you the best advice that I can as a former representative of bank lenders. I'm familiar with the processes and can give you good advice on the best way to give you the best chance at keeping your home. Until next time, I'm Matt McArthur at Clear Counsel Law Group. Hope to see you soon.
