“I am six months behind on my mortgage, got denied on my loan modification and I have a foreclosure notice in the mail.  I want to keep my house – what can I do?”

One option would be to file bankruptcy.  A bankruptcy filing stops the foreclosure process and gives you some time to organize your finances to pay for your home.

In bankruptcy, if you want to keep the home you must pay the mortgage.  Bankruptcy allows you to reduce or eliminate other debts so you can pay the mortgage.

There are two main types of bankruptcies – Chapter 7 and Chapter 13.

In addition to the requirement that you need to pay the monthly mortgage payment to keep the home in a bankruptcy, with a Chapter 7 filing, you must pay all the mortgage arrearages (i.e. 6 months of payments) upfront.

Contrast this with a Chapter 13 filing, which allows you to pay the mortgage arrearages through a payment plan over time at zero percent interest.