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  1. #1

    Default Filing for Bankruptcy With Home Mortgage About to Go Into Default

    My question involves bankruptcy in the state of: California

    My family home is about to go into default. I am only working part-time and my spouse in unemployed. I have about $20,000 in debt and about 65,000- 85,000 in equity in home.

    If I apply for chapter 7 bankruptcy my understanding is that the property will be sold to take care of the debts I owe, Will I be able to come out with the rest of the equity to make a fresh start?

    I am still trying to get a co-signer to help me with refinancing as I got into a very bad interest only loan and I am paying $2,000 a month for the mortgage. With a good credit co-signer I could get my payments to about $900 a month, which would be totally doable. The loan is coming due in March (balloon payment) and I have bad credit due to closing our business 2 years ago. (most of the debt was business related - we were sole proprietors)

    I hate to lose the home (been in the family over 50 years) and my 2 year old grandson lives here with me. I am trying to figure out best way to go.

  2. #2
    Join Date
    Sep 2010
    Posts
    19,846

    Default Re: Filing for Bankruptcy With Home Mortgage About to Go Into Default

    Bankruptcy would seem ill-advised here. Sell the house, pay off the debt and you will have plenty to go forward.
    If you get foreclosed upon, you will not net as much.
    You're not going to shield anything additional in bankruptcy given this situation.

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