If you get behind on your mortgage payments, your mortgage company will eventually want to seize your home and sell it to recover their money. If there is a shortfall when they do this, you will be responsible for the shortfall.
For example, if you owe $200,000, and they sell the house and get $190,000, they will pursue you for the $10,000 shortfall. If that happens, is it necessary to declare personal bankruptcy, or do you have other bankruptcy alternatives?
First, you should take all reasonable actions to stay current with your mortgage, and to prevent the bank from taking your house. This would include negotiating with the bank to defer mortgage payments until you can get back to paying regularly.
Second, you could attempt to switch to a different mortgage lender, perhaps through a mortgage loan debt consolidation or other type of mortgage refinancing.
Third, you could attempt to borrow from family or friends until you are back on track.
If those alternatives don’t work, and the bank does seize your house, you can still negotiate with the bank to repay the shortfall. Ask them to convert the shortfall to a loan that you can repay over time.
Only if these bankruptcy alternatives are not successful should you consider personal bankruptcy as a way to deal with a shortfall on a mortgage
Posted by Editor Bankruptcy Alternatives @ 12:08 am