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Scura, Wigfield, Heyer, Stevens & Cammarota Blog

A Chapter 7 Bankruptcy Wipes Out All Mortgage Loans

[fa icon="clock-o"] July 24, 2012 [fa icon="user"] John J. Scura III [fa icon="folder-open'] Bankruptcy, Chapter 7

chapter-7-bankruptcy-and-mortage-loanMany of our clients are seeking to get out of both credit card debt and mortgage debt on a home through a Chapter 7 bankruptcy.   I have been surprised lately that some clients think that they are still responsible for mortgage debt after the Chapter 7.  While the mortgage is still a lien on real estate that you own, you wipe out any personal responsibility to pay that loan through the Chapter 7 bankruptcy discharge.  Thus, after the chapter 7 is done you do not need a short sale or any further action to get out of the mortgage debt. 

Usually You Still Have Time In the House After a Chapter 7 Bankruptcy

You will still even get time in the house after the Chapter 7 typically - depending upon how far along the bank is in the foreclosure process.  The bank still has to foreclose after the Chapter 7 is concluded.   I also try to explain to clients that the foreclosure is only the bank going after its lien on the house and taking back its collateral - the real estate.  The bank cannot collect money from you through the foreclosure and, if you went through the Chapter 7 bankruptcy successfully, there is nothing the bank can ever do to you personally to collect any further monies.    

Contact our Chapter 7 Bankruptcy Attorneys in New Jersey for a Free Bankruptcy Consultation today. 

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John J. Scura III

John fights hard for his clients and tries to educate them so they understand what is going on with their particular legal problem. John has been Certified by The Supreme Court of New Jersey as a Civil Trial Attorney. Whether it is a personal injury case, bankruptcy case, litigation case or other type of matter, John wants his clients to participate in the decision making process toward solving their problem in the best way possible.

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