The Marquee Loop: Mortgage Myths; Bankruptcies part 2

Myth #1: Filing for bankruptcy means you automatically lose your house. Truth: While it’s true that filing for bankruptcy can have an impact on your mortgage, it doesn’t necessarily mean you will lose your house. The type of bankruptcy you file for, as well as the equity you have in your home, can affect whether you can keep your house or not.

Myth #2: You can’t get a mortgage after filing for bankruptcy. Truth: While bankruptcy can stay on your credit report for up to 10 years, it doesn’t mean you can’t get a mortgage during that time. Some lenders may be willing to work with you if you have a solid income and a good credit score.

Myth #3: You can’t refinance your mortgage after filing for bankruptcy. Truth: Refinancing your mortgage after bankruptcy is possible, but it may be more challenging to find a lender who is willing to work with you. You may also have to pay a higher interest rate and provide more documentation to prove your income and creditworthiness.

Myth #4: Filing for bankruptcy erases all mortgage debt. Truth: Filing for bankruptcy doesn’t necessarily erase all mortgage debt. If you want to keep your house, you may still have to make payments on your mortgage. However, filing for bankruptcy can help you restructure your debt and potentially make your mortgage payments more manageable.

It’s important to talk to a qualified bankruptcy attorney or financial advisor if you’re considering filing for bankruptcy and have questions about how it could affect your mortgage.