Mortgage In a Raleigh, NC Chapter 7 Bankruptcy
Property that is mortgaged
If you have property that is mortgaged, or that has a consensual lien on it (where you gave permission for the lien), you have two alternatives in a Chapter 7:
- Retain and Pay– You can keep the real estate without signing a reaffirmation agreement, but you must continue making timely payments.
- Surrender. In a Chapter 7 bankruptcy you can often give the property back and owe nothing. This is a good option when:
- The payment is unaffordable,
- You owe more for the property than it is worth,
- The property is in poor condition or is worthless and you want to return it.
Lately, more banks are not taking possession of homes after foreclosure. This is because if they can’t sell a home, it is better to have someone in it and maintaining the property than leaving it vacant. Also, the original home owner is required to pay property taxes and H.O.A. dues until the bank takes possession of the property. We have clients who are still able to live in their home after five years of paying no mortgage. This is not to be expected, but it happens a lot. The foreclosure process in North Carolina generally takes six months or more, so most people can continue to live in their homes without paying a mortgage for at least nine months from the time they stop paying the mortgage.
Most people do not realize that they may be able to live in their homes for years without paying a mortgage. They often leave before the home is even foreclosed upon. Anxiety is a big factor in many people’s decisions to move. Banks are surprisingly unorganized, and if you look at this as a game, you can save a lot of money!