Can you include your mortgage when you file for bankruptcy?

If you’ve been struggling for years to pay off your debts in California, filing for bankruptcy might be your only option. It’s a drastic solution, but it allows you to either pay off your debts or to get some of your biggest debts discharged. Your credit score will take a hit, but you’ll be able to rebuild your score over the next several years as you get your finances under control. For many people, a mortgage is the biggest debt that they have, and it’s frequently the hardest to pay off.

Can you include your mortgage when you file for bankruptcy?

According to bankruptcy law, you can include your mortgage when you file for bankruptcy. However, the outcome of your bankruptcy depends on which option you choose. If you go for Chapter 7, you’ll be able to discharge your debts, but you might also lose your house in the process. If you choose Chapter 13, you’ll be able to pay off your debts through a payment plan, which allows you to keep your house.

To file for bankruptcy, you’ll choose the right option with the help of an attorney. Chapter 13 allows you to keep most of your assets, but if there’s no way to pay off your debts, you might have to go with Chapter 7. Once you’ve made your decision, you’ll have to file a petition for bankruptcy. Make sure you include your mortgage lender as a creditor when you file your petition with the court. When your petition is accepted, your attorney will help you proceed from there.

How do you know which path is right for you?

Figuring out the best option can be challenging. While Chapter 13 sounds appealing because it lets you keep your house, you’ll also have to figure out a payment plan that allows you to pay off your debts. Depending on your situation, your attorney may recommend Chapter 7 instead. In any case, your attorney could help you make the right decision and guide you through the process so you can keep as many of your assets as possible.