Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
Hi - my name is XXXXX XXXXX I'm a Bankruptcy attorney here to assist you.
Yes - either a Chapter 7 or a Chapter 13 Bankruptcy can discharge your liability for the balance of the mortgage after the house sells in a foreclosure sale.
If the lender has already gotten a deficiency judgment when you file a Bankruptcy, the Bankrutpcy will discharge the judgment. If the lender has not already gotten a deficiency judgment at the time you file a Bankruptcy, that will prevent the lender from getting a judgment.
When determining whether a debt is a consumer or a business debt, what matters is what the obligation was originally obtained for. Bankruptcy Stat. 101(8).
If the mortgage for your rental property was used to purchase a home for you to live in, that mortgage is still consumer debt, even though the property is now a business property, and currently being used to earn income.