MORTGAGE PAYMENTS AFTER A CHAPTER 7 DISCHARGE

You filed bankruptcy and the lender is still wanting you to make payments.  If you filed a Chapter 7 bankruptcy, you are no longer liable if you fail to make payments on your mortgage payment.

This does not mean that you get to keep the house and not pay the mortgage lien holder.  Even though you cannot be sued personally for a failure to pay the mortgage payments as they come due, the lender can still foreclose on the property.   There are two types of liability that are a part of the duty to make payments on the mortgage.   A lender can usually use both types of liability one called In personam liability and the other called In Rem liability.

After filing a Chapter 7 bankruptcy and obtaining your discharge, a debtor is only liable to a mortgage creditor for In Rem liability.  The creditor still has the right to sell the property to satisfy the indebtedness owed.  This is why a lender can foreclose on the property either before or after a Chapter 7 Bankruptcy discharge.

In personam liability gives the lender the right to look to a person for payment if the sale of the property did not pay the full amount owed to the lender.   A Chapter 7 bankruptcy only discharges or eliminates the In personam liability.

So no, after you get your discharge in a Chapter 7 bankruptcy, you do not have to make the mortgage payments.  If you do not make the payments, however, the lender can foreclose on the property.

About Nathan Davis, Esquire

Born in Charleston, South Carolina, Nathan Davis has been practicing law for many years. Mr. Davis has a wide variety of experiences having practiced domestic relations, criminal law, social security law having also practiced collection law in the past. This knowledge is helpful when someone needs to restart their financial life. The practice is now primarily bankruptcy and debtor representation work, but, Mr. Davis continues to also practice real estate law, trusts and estates and a general litigation practice. I believe that the most important part of representation is trying to leave you better off when the case is finished than when you started. Although I will do as my client directs, I will always tell you if I think that you are making a mistake. Bankruptcy is about a "fresh start". If you do not make changes in what you are doing, you will be doing what you are doing now in the future. There is no shame in bankruptcy or other steps that you may take to start your life over. Too often, people worry more about things than about themselves, their family or their future.
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