CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Bankruptcy Didn’t Fix My Problems and I’m Behind on My Mortgage: Can a Bankrutcy Trustee Sell My Home?

can a bankruptcy trustee sell my homeCan a bankruptcy trustee sell my home?

For many people, bankruptcy is the key to resolving financial problems. It’s a drastic option that can eliminate debt entirely. In other cases, it reorganizes debt and makes repaying existing debts affordable.

As effective as bankruptcy is for the majority of people who choose to file, it’s not perfect. There are instances in which bankruptcy doesn’t eliminate all someone’s financial problems. And unfortunately, problems that occur during bankruptcy can put someone’s mortgage at risk of foreclosure.

There are also instances in which situations arise after bankruptcy that put your home at risk. Depending on how recently you filed for bankruptcy, it might not be an option when new financial issues put your mortgage at risk.

If any of these scenarios apply to you, what should you do next?

Much of what happens regarding your mortgage after bankruptcy depends on timing and the chapter bankruptcy you used.

Here’s what you need to know:

Chapter 7 Bankruptcy and Mortgage

To file for Chapter 7 bankruptcy when you own a home, you must be current on your mortgage payment. You must continue to stay current on your mortgage throughout the bankruptcy if you want to keep your home.

Should you fall behind on your mortgage during the bankruptcy process, one of two things can occur:

If you fall behind on your mortgage before you receive your final decree and your bankruptcy is complete, the mortgage lender can take legal action against you. They do this by filing a Motion for Relief from the Automatic Stay. If the court approves their request, they’ll have the power to begin foreclosure proceedings.

In most cases, courts grant the Motion for Relief from Automatic Stay unless the homeowner brings their payment current by the time of the hearing.

Can a Bankruptcy Trustee Sell My Home?

In many cases, yes, a bankruptcy trustee can sell your home. More often than not, the bank will foreclose and evict you from your home. If your mortgage is paid in full, the bankruptcy trustee can sell your home and use the profits to repay creditors.

However, there are ways to protect your home. This is why it’s so important to contact an attorney as soon as possible. The sooner you act the easier it is to protect your home.

If you fall behind on your mortgage after receiving the final decree, it’s no different than if you’d never filed for bankruptcy. Your bankruptcy is complete, so the foreclosure is handled as it would’ve been before your bankruptcy.

This means the bank doesn’t need permission to move forward with foreclosure proceedings because there is no automatic stay in place.

The only difference is you can’t turn to bankruptcy now to buy time or prevent foreclosure due to the laws regarding multiple bankruptcy filings.

The best thing you can do as a homeowner as you emerge from Chapter 7 bankruptcy is to keep your payments current. Make your mortgage your number one priority among your debts and if you anticipate a financial problem, contact your mortgage lender immediately.

Chapter 13 Bankruptcy and Mortgages

Many homeowners opt for Chapter 13 bankruptcy over Chapter 7 because for many, it’s easier to protect ownership of their home. But this doesn’t mean mortgage protection is fully guaranteed. This is especially true if you fail to meet your obligations regarding your mortgage within the bankruptcy.

Again, timing is very important when it comes to foreclosure efforts during bankruptcy.

If you’re up-to-date on your mortgage payments when you file for bankruptcy, your mortgage will not be included in the bankruptcy. You’ll continue to pay as you have all along and the bankruptcy trustee will have nothing to do with your mortgage payments. It’s called “paying outside of the plan.”

If you’re behind on your mortgage payment when you file for bankruptcy, as many people are, it is included in your bankruptcy payment. Payments are made to the trustee and the trustee will distribute the money accordingly.

What happens if you’re aren’t behind when you file Chapter 13 but you fall behind?

Your mortgage is a secured debt. This means it cannot be discharged in your Chapter 13 bankruptcy. Instead, it will be added to your repayment plan. Your payment plan will increase and reflect the amount owed. If you are unable to afford the payment increase your home will be at risk of foreclosure.

Filing for bankruptcy might be the smartest decision you’ve ever made. However, this doesn’t mean it will solve all of your problems. It might just be the first step in a long process of getting your financial situation under control

Have you found yourself wondering…

  • Can a bankruptcy trustee sell my home…?
  • Will the bank evict me from my home…?
  • How long can I go without paying my mortgage…?

It’s time to contact a bankruptcy attorney. They can help you evaluate your options and make the best decision based on your circumstance.

For more information or to schedule a consultation, contact the Law Offices of Robert M. Geller at 813-254-5696.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

How Does Getting Married Affect Bankruptcy?

If you are considering bankruptcy, you may be wondering how getting married affects your ability to file. The answer is...
Read More

How Does Filing for Bankruptcy Affect a Vehicle Loan?

If you're considering bankruptcy, you may be wondering if you'll be able to keep your car. The answer depends on...
Read More

8 Ways to Deal with Student Loan Debt

If you're one of the millions of Americans saddled with student loan debt, you're probably looking for ways to minimize...
Read More

Tips for Handling Credit Card Debt

If you're struggling with credit card debt, you're not alone. The average American household owes nearly $6000 in credit card...
Read More

Don’t Fall for These Common Bankruptcy Myths

There are a lot of misconceptions out there about bankruptcy. Working with a debt defense attorney is one of the...
Read More

Can Filing for Bankruptcy Affect My Career?

It’s common for people considering bankruptcy to wonder how filing affects their job. The answer to this question depends on...
Read More

Can I Fix My Credit After Bankruptcy?

Wondering how to improve credit after bankruptcy? Here's what you need to know. Bankruptcy can be a fresh start for...
Read More

What Happens If I Can’t Afford Chapter 13 Bankruptcy?

Are you wondering what happens if I can’t afford my chapter 13 payments? Here's what you need to know when...
Read More

Help I Regret Filing for Chapter 7 Bankruptcy

Bankruptcy isn't the right choice for everyone. Depending on your unique financial situation, you may be able to find other...
Read More

How a Bankruptcy Attorney Helps You Avoid Problems When Filing

Do you know what mistakes to avoid when filing for bankruptcy? If you're considering filing for bankruptcy, it's important to...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions