Can Bankruptcy Affect My Mortgage?

mortgageIf you are facing the possibility of bankruptcy, you probably have a lot of different questions and concerns. Fortunately, here at Ursulova Law Office, we can help you get the answers that you need. One of the biggest questions we get from people considering bankruptcy is how it will affect their mortgage. There are a number of factors that come into play here, though, depending on which type of bankruptcy you decide to file.

Mortgage Liability 

Your mortgage liability depends on the type of bankruptcy that you choose. Your Brooklyn bankruptcy attorney can help you determine which is right for you. In Chapter 13 bankruptcy, you still remain liable for your mortgage. You do, however, have an option to repay the past due amount by setting up a payment plan with the lender. Chapter 7 bankruptcy discharges all of your outstanding debts, in most cases. Your mortgage, however, is secured by your home so as long as you are in possession of the home, the loan will not be satisfied.


Declaring bankruptcy during a foreclosure can stop the process entirely. Your Brighton Beach bankruptcy attorney will file the paperwork, at which time a judge will impose a stay on the creditors, including your mortgage lender. They must wait for the court to evaluate your case and make a decision regarding your bankruptcy filing before proceeding with the foreclosure process.

Reaffirming Debt or Walking Away 

If you feel that your mortgage payments will still be feasible after bankruptcy, you can choose to reaffirm your mortgage with the lender. This is generally only an option for those whose mortgages are current and not past due. If you can reach an agreement with the lender as to repaying the loan after bankruptcy, the judge will not include it in the proceedings.

On the other side, you can choose to completely walk away from your mortgage as part of a bankruptcy filing. If you do, the lender becomes the owner of the property once again. In the event that you owe more than your home is worth, the lender might not be able to get all the money that you owe at the time of sale. This could create a deficiency balance, but most states will allow you to volunteer for foreclosure and discharge the balance through bankruptcy.

Talk to a bankruptcy lawyer in Brooklyn to learn more about your options for your mortgage during bankruptcy. We’re here to help whenever you’re ready to talk, so contact us today.


Ursulova Law offices, P.C.

Contact Ursulova Law Offices, P.C. to find out how our NY Bankruptcy Attorneys can help you today. Our offices are located in New York, Brighton Beach, Brooklyn and Garden City.


  • This field is for validation purposes and should be left unchanged.