What types of bankruptcy can I file, and how do they impact my mortgage?

Individuals typically have the choice to file for Chapter 7 or Chapter 13 bankruptcy, each with different implications, especially regarding mortgage loans. Chapter 7 bankruptcy is often referred to as liquidation bankruptcy. In this process, most unsecured debts are discharged. However, if the individual has a mortgage on their home, they may want to keep the property. Filing for Chapter 7 can lead to the relinquishment of the home if payments are not maintained. If the individual wishes to keep their home, they must remain current on the mortgage payments, or the lender, such as Nationstar Mortgage, may initiate foreclosure proceedings. On the other hand, Chapter 13 bankruptcy is known as reorganization bankruptcy. This allows individuals to retain their assets while creating a repayment plan to address their debts over three to five years. Under Chapter 13, individuals can catch up on past-due mortgage payments while also keeping their home. It provides a structured environment for managing debts and can often be a favorable option for those looking to save their properties from foreclosure. The specific impact on a mortgage can vary depending on several factors, including the type of loan, the jurisdiction, and individual financial circumstances. Nationstar Mortgage Bankruptcy Department may offer more tailored information regarding how your specific mortgage may be affected during the bankruptcy process. It is always advisable to consult with a legal professional or financial advisor who could provide guidance tailored to your situation and help you navigate these complex processes. For more detailed information, you may look at the current website associated with Nationstar for contact details and additional resources.