Posted by kevin on March 11, 2010 under Foreclosure Blog | Comments are off for this article

Bankruptcy still works for some people.  If you own a home with or without equity, are not too far behind on your mortgage, have significant unsecured debt like credit card debt, and have a job, Chapter 13 may be a vehicle whereby you can keep your house, get rid of a second mortgage that is  completely underwater , and discharge significant amounts of unsecured debt.  But here s the kicker.  You do not get to lower the amount due on the first mortgage for your principal residence.  You pay the mortgage going forward to the lender.  If you are in arrears, you can spread the arrears out over up to 60 months, and pay them off monthly.

Congress rejected an amendment to the Bankruptcy Code which would have allowed bankruptcy judges to modify first mortgages in a Chapter 13.  Lobbying is alive and well.

For more information about bankruptcy, go to

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