Latest Posts
Home > Ask The Get Out of Debt Experts > Can I Keep My House But Discharge My Mortgage in Bankruptcy?

Can I Keep My House But Discharge My Mortgage in Bankruptcy?

“Dear Steve,

I have $38,000.00 in credit card debt. I lost two jobs during the recession and took early social security at age 62 to survive. I barely pay the mortgage and necessary bills. I stopped paying all credit cards about three or so months ago. My house is approx $125,000. underwater. Because I got a loan modification a few years ago I have been able to stay current on mortgage payments.

I have two main questions:
1. Is bankruptcy the best option for me?
2. If I file for bankruptcy, clearly I would not reaffirm such an upside down mortgage. If the home is discharged in the bankruptcy will I be able to continue to live in it if I stay current on the mortgage payments?


Before you file bankruptcy, which sounds like a logical approach based on what you shared, I would suggest you first let the bank foreclose on the house and take it back. Otherwise you’ll wind up discharging the mortgage but still be on the hook for the house.

Talk this over with a local bankruptcy attorney.

I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.

Then use the free How to Get Out of Debt Calculator to review your options.

Once you’ve identified a company you want to work with, then follow my step-by-step guide on how to check out a debt relief company.

Please post your responses and follow-up messages to me on this in the comments section below.

Get Out of Debt Free Hotline
debt settlement helpstudent loan help

About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

Get My FREE Get Out of Debt Guy Newsletter

It is the smart thing to do.

I promise to keep your email safe and secure.


I want to keep you posted each weekday with just one email about the latest get out of debt news, scam alerts and information to beat back debt.

You can unsubscribe at any time with just one click.

After you subscribe, check your email to confirm your subscription. If the confirmation email does not appear in your inbox in a few minutes, check your spam folder for it. Sometimes it likes to annoyingly hide there.

  • It will keep you posted on the latest scams.
  • You will be alerted to the latest articles.
  • You will wind up smarter than everyone else dealing with debt.