Personal Bankruptcy and Homeownership

If you own a home, and are considering filing for bankruptcy, you are probably wondering how bankruptcy will affect your homeownership. How your mortgage is handled in bankruptcy really depends on several factors, including whether your file for Chapter 7 or Chapter 13, as well as what state you live in.

In general, to avoid foreclosure, you must ask the bankruptcy courts permission to "reaffirm" your mortgage loan and lease agreement and continue to make your home payments. Following is some chapter-specific information.

Chapter 7

Chapter 7 bankruptcy typically involves liquidation of all nonexempt assets. Exempt assets are listed on your Statement of Financial Affairs and are protected against seizure by your unsecured creditors. State and federal law dictates which assets can be claimed as exempt—depending on what state you live in, you may be able to choose either the state or the federal law. Some states allow for homestead exemptions, which exempts equity in your home from repossession.

Chapter 13

If you file Chapter 13, you are likely to keep your home, assuming you don’t have a significant non-exempt equity. You can keep other non-exempt assets if you follow your payment plan. However, if you aren’t able to maintain your payment plan, your non-exempt assets may be liquidated to pay creditors.

Better Business Bureau

MMI is proud to have achieved an A+ rating from the Better Business Bureau (BBB), a nonprofit organization focused on promoting and improving marketplace trust. The BBB investigates charges of fraud against both consumers and businesses, sets standards for truthfulness in advertising, and evaluates the trustworthiness of businesses and charities, providing a score from A+ (highest) to F (lowest).
Candid

MMI has achieved a Gold Seal of Transparency by Candid (formerly GuideStar), a leading source for insights on thousands of nonprofit organizations. For decades, Candid has provided data that powers hundreds of websites, programs, and applications related to philanthropic giving in order to help grantors make informed decisions.
Trustpilot

MMI is rated as “Excellent” (4.9/5) by reviewers on Trustpilot, a global, online consumer review platform dedicated to openness and transparency. Since 2007, Trustpilot has received over 116 million customer reviews for nearly 500,000 different websites and businesses. See what others are saying about the work we do.
Department of Housing and Urban Development

MMI is certified by the U.S. Department of Housing and Urban Development (HUD) to provide consumer housing counseling. The mission of HUD is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD provides support services directly and through approved, local agencies like MMI.
Council On Accreditation

MMI is proudly accredited by the Council on Accreditation (COA), an international, independent, nonprofit, human service accrediting organization. COA’s thorough, peer-reviewed accreditation process is designed to ensure that organizations like MMI are providing the highest standard of service and support for clients and employees alike.
National Foundation for Credit Counseling

MMI is a longstanding member of the National Foundation for Credit Counseling® (NFCC®), the nation’s largest nonprofit financial counseling organization. Founded in 1951, the NFCC’s mission is to promote financially responsible behavior and help member organizations like MMI deliver the highest-quality financial education and counseling services.