| If your home is in the process of being foreclosed or has already been foreclosed, you will probably end up owing the bank money after the foreclosure. This is referred to as a deficiency. A mortgage loan is a secured debt until the foreclosure occurs. Once the foreclosure occurs and your house is taken from you, any remaining debt is now considered unsecured and 100% dischargeable in a chapter 7 bankruptcy. You don’t have to wait for foreclosure if you can’t afford to live in the house you own. If your home has just become too expensive to afford for any reason, you can walk away from it and the mortgage loan in a chapter 7 bankruptcy. Your bankruptcy lawyer will advise you on how to proceed if you are faced with this type of financial situation. |
