Ariano & Reppucci Articles Does the Bank Take Your House in Chapter 7 Bankruptcy?

Does the Bank Take Your House in Chapter 7 Bankruptcy?

By Christopher Ariano  Aug. 10, 2014 7:51a

The bank generally does not take your house because you have filed Chapter 7 bankruptcy. However, the filing of Chapter 7 bankruptcy may stir up another reason to why a house is sold. This would only happen in a type of scenario in which the homeowner is neglectful on mortgage payments prior to filing Chapter 7 bankruptcy. The homeowner then files Chapter 7 bankruptcy to stop the sale on the house, but is unable to bring the mortgage payments current. In this case the filing of Chapter 7 bankruptcy only delays the selling of the home. It woud likely be in your best interets to convert your case to Chapter 13 bankruptcy where you can repay the arrears through a 3-5 year repayment plan.

Once the lender is notified of Chapter 7 bankruptcy and you are delinquent, it will then file a motion with the bankruptcy court to remove the house from bankruptcy protection. The bank is not allowed to take the house simply because the homeowner has filed bankruptcy. You should consult an experienced attorney to discuss Chapter 7 and Chapter 13 bankruptcy and debt settlement.

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