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Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 30908
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I am in default on a residential mortgage--not my homestead

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I am in default on a residential mortgage--not my homestead but where I live most of the time. The property is worth far less than the balance on the mortgage, as I bought it at the heighth of the real estate market. I have been trying to modify the mortgage and am close to getting this done. In the meantime, another judgment creditor has issued an execution against the property. I am now considering bankruptcy but need to know how that will affect my efforts to modify the mortgage. I also want to know if I can remain in the house during a bankruptcy proceeding.
Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney. Thanks for using JA! I'll be glad to assist you.

A chapter 13 bankruptcy does allow a debtor to keep his/her property and avoid liquidation. However, the general rule is that the property that serves as a second home cannot serve as a drain on your finances and takes money that could be used to pay your creditors.

Thus, if the second home is a rental property, and it generates income over and above the mortgage, then it would be possible to keep. However, if the property isn't something that earns you money, then you can expect the trustee to object to you keeping it UNLESS retaining the property doesn't drain your ability to pay your other creditors adequately.

If you can establish that keeping the property won't hinder your ability to make payments under your plan, then you would have to get the court to approve the financing. If that occurs, then you can proceed.
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