If I filed for Chapter 7 but was granted a loan modification, what will happen if I now decide to walk away from my house?

UPDATED: Jan 13, 2014

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If I filed for Chapter 7 but was granted a loan modification, what will happen if I now decide to walk away from my house?

I filed Chapter 7 about a year ago. My house was in default and was included in the bankruptcy. However, the bank worked with me and granted a “loan modification” lowering the interest rate and allowing me to stay in the house. However, I now find there is major structural issues with the house that I would never be able to afford to have fixed. I want out. Due to the ‘loan modification’, what would happen now if I quit paying the mtg. and moved? Would it fall back under the cover of the bankruptcy?

Asked on January 13, 2014 under Bankruptcy Law, Louisiana


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

For a more definitive answer, you need to consult with a bankruptcy attorney who can review all the facts, the documents, and the exact timeline in detail; that said, from what you write, there is a good chance that what you did affirmed the bank loan, which took it out of bankruptcy protection. That would mean that you could be personally liable on it.

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