If I have credit card debt and an outstanding debt on my second mortagage, can I file for bankruptcy without losing my home?

UPDATED: Jan 3, 2013

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If I have credit card debt and an outstanding debt on my second mortagage, can I file for bankruptcy without losing my home?

Asked on January 3, 2013 under Bankruptcy Law, New York


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

There is no simple answer to your question: bankruptcy is a complicated issue and you should consult with a bankruptcy law attorney before filing.

That said, as a general rule, if you have a mortgage on property, you can file bankruptcy and keep the property IF you "affirm" all the mortgages (e.g. if you have a first and second mortgage, you have to affirm both) AND keep paying both. (There will be a pause in the payments, due to bankruptcy's automatic stay, but ultimately, you will have to begin paying again.)

Bankruptcy does  not let you keep your property without paying your mortgage. If you don't pay, the lender can foreclose, even though you filed bankruptcy. If you choose to not affirm the loan(s), however, while the lender can foreclose, you cannot also be sued--all they'll get is the home.

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