Question by sammieswan: what happens to your mortgage and secured loans if you go bankrupt?
Best answer:
Answer by wizjp
You can reaffirm some of them if you want to try and pay them off. Some will be discharged by order of the bankruptcy court; some will be held valid and paid out of assets.
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You do not lose your home; which is good. And you would have to make pre and post petition payments, to the bankruptcy court and the mortgage company.
Depending on your income and the value of your home, then any second lien of your home can either get discharged or not.
Again, it’s all depending on your circumstances and on the Bankruptcy Trustee.
It depends on several things. If you file chapter 13 (wage earner) you keep them and they are included in your payment plan.
If you file chapter 7 (liquidation) you can lose them or you can reaffirm on the notes and continue to pay. The exception to this would be if you lived in a State that has homestead exemption. If you do, they can not take your primary residence.
If you reaffirm, be sure to contact the lenders and request that they continue to report. This will help you re-establish your credit after your bankruptcy is discharged.