What is the process, qualifications and ramifications of declaring personal bankruptcy?
Answer apologize for taking so long to get back with you on our question. I usually answer these questions as soon as they are asked. In answer to your question, the reason they can’t just declare bk and keep their homes is because a chapter 7 bankruptcy does NOT discharge debts that are secured by real property, such as a mortgage. If they were to file a chapter 7 it would delay the foreclosure but it would not have the effect of making the mortgage debt capable of being discharged. The debtor has three options in a chapter 7 with respect to secured property (usually houses and cars); (1) reaffirm the debt and continue to keep paying as if the bk had not been filed (but the problem with that is that if they are already facing foreclosure, the creditor can get around the bk by filing a motion and asking the court’s permission to go ahead with the foreclosure if the debtor doesn’t immediately catch up on the payments; (2) surrender the property and not have to pay any more because then
