Ask The Get Out of Debt Experts Bankruptcy Related

Can I Get Rid of My Mortgage in Bankruptcy and Keep My House? – Kim

Written by Steve Rhode

“Dear Steve,

I am a single mom of three who teaches for a living. Teachers have not had a pay raise in 5 years but interest and living expenses continue to rise. I am trying very hard to pay all of my debt but it seems like something comes up all of the time that causes me to get behind again. I am considering bankruptcy but still have a lot of research to do before to do something so harsh.

My home mortgage is financed by an individual but there is legal paperwork giving the details of the loan. If I filed bankruptcy, could I include this loan but still keep my house?


Dear Kim,

The answer to this might be best explained when you meet with a local bankruptcy attorney, You can click here to find a local bankruptcy attorney, if you want to.

And by all means I fully encourage you to do all sorts of research but I’d start with talking to a couple of real live attorneys rather than relying on what you read anywhere online.

The situation you describe is unusual in that the bankruptcy will discharge your obligation to repay the loan but does not clear the lien against the property.

If you stopped making payments the owner of the property could foreclose on you and if you continue to make payments they may not be applied against your outstanding balance since the loan does not exist anymore.

It seems that if you are not upside down on the home you’ll want to talk to the bankruptcy attorney about potentially reaffirming the mortgage and continue it through the bankruptcy. There are some consequences for doing that which you should discuss with your attorney.

If you discharged the mortgage in the bankruptcy and then wanted to sell the house you’d still have to repay the lien against the house to get a clear title to transfer.

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

You can read this other post by a bankruptcy attorney that will also explain the situation.

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


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

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.

Leave a Comment

Scroll to Top