If I get a house months before filing bankruptcy and then file Chapter 7 after, could I still keep the house?

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If I get a house months before filing bankruptcy and then file Chapter 7 after, could I still keep the house?

If so, what would be the cons to this?

Asked on May 8, 2015 under Bankruptcy Law, Indiana

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

If the house has a mortgage, you can only keep it if you keep paying the mortgage (or such other amount as the lender agrees to--e.g. they may agree to modify the loan). The bankruptcy will temporarily stop, or stay, any foreclosure for non-payment, but ultimately, if you don't pay the mortgage, the lender will be able to foreclose--thought they will not be able to also sue you for any unpaid balance of the loan.

If there is no mortgage, the house will be an asset included in your bankruptcy filing, and there are circumstances under which you may have to liquidate (sell) it.


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