Yes! But in most circumstances you will be protected from the mortgage company coming after you from any more money.
A discharge from Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy will protect a homeowner from an unscrupulous mortgage company attempting to collect money after a foreclosure. However, a discharge from Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy does not prevent a mortgage company from foreclosing on a house, if the homeowner is behind on payments.
Therefore, after a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, a homeowner can stay in his or her house as long as he or she makes all the mortgage payments. If he or she cannot make the mortgage payments, the house will be lost in foreclosure, but the mortgage company will not be able come after a homeowner for any more money.
Now, there is one exception, a reaffirmation. A reaffirmation is a contract signed while in Chapter 7 Bankruptcy, approved by the Bankruptcy Court, that requires that a homeowner make all mortgage payments after Chapter 7 Bankruptcy. If a homeowner agrees to a reaffirmation during a Chapter 7 Bankruptcy, he or she can be liable for the remaining amount of the mortgage after Bankruptcy and foreclosure. This is called a deficiency.
Deciding whether or not to sign a reaffirmation can be a tricky question. It is not a question that you should make on your own. Contact us at Croke & Croke, S.C., or call us at (414) 539-6184, to help you keep your home and sort through your post Chapter 7 Bankruptcy or Chapter 13 Bankruptcy options.