including your house in bankruptcy

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including your house in bankruptcy

I live and Michigan and my question is , If I include my house in bankruptcy, it goes to foreclosure!? Am I relieved of all financial responsibility even when it is resold ?

Asked on June 22, 2009 under Bankruptcy Law, Michigan

Answers:

GW, Member, Michigan and Hawaii Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Technically you don't "include" or "exclude" an asset from your bankruptcy. You can claim an exemption, in some cases that probably don't apply here; you can reaffirm the mortgage debt and keep the house; you can file a chapter 13 bankruptcy and propose a plan to get current on back payments and pay the mortgage going forward; or you can allow the lender to foreclose. To answer your question: In the ordinary case where a debtor files a Chapter 7 bankruptcy and allows the lender to foreclose on the property, the debtor is not liable for any deficiency. In short, yes, you are relieved of all financial responsibility.


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