Springfield, GA Bankruptcy Law Firms & Lawyers

In a chapter 13 you can pay arrears over a three to five year plan. However, the payments that become due after filing must be paid or else the lender can get permission to foreclose by filing a motion for relief from stay. The bankruptcy judge cannot modify your residential mortgage loan. Unless you can convince the judge to give you more time to catch up the "post-petition" payments relief from stay will be granted.

As long as you didn't reaffirm the mortgage in the chapter 7, you can walk away from the house with no financial penalty. The mortgage company will not be able to come after you for a deficiency. It is worth noting that, even if you had reaffirmed the mortgage, it is highly unusual for a mortgage lender to pursue a deficiency against a debtor. Pursuing a deficiency requires either a suit on the note, which can slow down the foreclosure process, or a confirmation of sale, which is a mini-trial that occurs after foreclosure. This usually only occurs when the debtor owns more than one home and the lender is fairly certain the debtor has lots of assets. This is because both suits on note and the mini-trial with a confirmation can be very costly. Mortgage companies realize that "you can't squeeze blood from a rock," so they usually allow you to walk away from property without any real consequences, aside from reporting a foreclosure on your credit report. Since you filed chapter 7 and didn't reaffirm, the mortgage company will not even be allowed to make a negative report on your credit history. You can walk away free and clear.