Why would you want to surrender your home in a Chapter 13 bankruptcy?
A lot of people file a Chapter 13 to prevent their home from being foreclosed on, but that doesn’t mean that you can’t surrender your home in a Chapter 13 bankruptcy just as you could in a Chapter 7 bankruptcy. If your income is such that you are not eligible to file for a Chapter 7 bankruptcy, but you can’t afford your plan payment with the mortgage included you may decide to surrender your home so that your payment plan is feasible.
What happens to the amount owed on the mortgage when you surrender your home in a Chapter 13 bankruptcy?
When you surrender your home in a Chapter 13 bankruptcy there is no longer any collateral on the loan and therefore the unpaid balance on the mortgage would be paid back at the same percentage as your other unsecured creditors. This will greatly lower your plan payment and allow you to be debt free in 3-5 years.
If you have questions about whether or not you should surrender your home if you qualify for a Chapter 13 bankruptcy, contact Dailey Law Offices to speak with one of our experienced Columbus Bankruptcy Lawyers today.