WHAT HAPPENS IF YOU'RE IN BANKRUPTCY BUT CAN'T MAKE THE MORTGAGE?

As some Ohio residents know, filing for bankruptcy as a way to save a home from foreclosure is not uncommon. Sometimes lenders are willing to make modifications to a mortgage to help a family or individual remain in a home. What happens, however, if you are several years into a personal bankruptcy filing and once again cannot make regular mortgage payments? If you're tired of trying to keep your home and want out, can you just let it go into foreclosure?

The answer is that you can walk away from your house if that is what you really want, but you may have other options too.

If you can't pay your current mortgage payments and you filed Chapter 13, you may request to convert your filing to a Chapter 7. Your income and assets will be reviewed to determine if you are eligible, but converting to Chapter 7 will let you walk away from your home.

If you filed for Chapter 13 bankruptcy, are not eligible to convert to Chapter 7 and your lender is not open to another mortgage modification, you can stop paying your mortgage. Eventually, your lender will request that your house be brought out of bankruptcy. Once that happens, the foreclosure process will likely begin. The foreclosure process is not usually fast-moving, though, so you may be able to stay in your home for several months or more to figure out next steps.

When you are already in the middle of a bankruptcy but are still having trouble making ends meet, it is really important to work with an attorney experienced in bankruptcy cases. Aside from understanding the complexities of all types of bankruptcies, an attorney can help explain options you might not have been aware of.

Source: Fox Business, "Can I Walk Away From Home in Bankruptcy," Justin Harelik, Dec. 11, 2013