mortage & Chapter 7

Guest 0.10 Dollars($)

What happens if I include my home (not keep it) in Chapter 7 filing?

I have heard that I may still be responsible for any part of my loan that is not covered by the mortage conpany's resale of the house...something like they will concider the differance as a seperate loan or that there will be Federal income tax reprocussions.

larry · Joined: 27 Jun 2007 Posts: 3328 473.40 Dollars($)

Hi xyratn,

Welcome to the forum.

If you file chapter 7 then your all nonexempt assets will be sold and after that you will still owe if the sell proceeds don't satisfy the amount you owe to the creditor. But he cannot harass you for the due debt and if you can pay it, that will have a positive affect on your credit repost.

Feel free to ask if you have any further questions.

Best of luck,
Larry

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.77 Dollars($)

Welcome xyratn,

Yes you will still be responsible for any part of my loan that is not covered by the property sale. But the mortgage company and the collection agencies cannot harass you for that reason as mention by Larry.

If the debt is forgiven by the mortgage company then you need not pay the Federal income tax because of the
Mortgage Debt Forgiveness Act

Feel free to ask the community if you have any further query.

JuanHdez · Posted: Tue Jun 03, 2008 8:56 am Post subject:

Hello XY,

Very good question! I first recomment that you seek the council of a BK attorney. From my experience the answer can very depending on your situations. I believe that if the loan as a pruchase money loan an a primary residence, the lender does not have recouser agains you.

Best o Luck

J

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