Usually people file for bankruptcy when they are unable to keep up with their mortgage payments, credit card payments, medical bills, etc.  Many people file for bankruptcy because they are unable to keep up with their mortgage payments and they do not want to lose their homes. When one files for a Chapter 7 bankruptcy, the mortgagor will not reduce the mortgage payments. In addition, filing for bankruptcy does not relieve one from those past unpaid mortgage payments; one still has to find a way to pay them off as reported by Fox Business in a June 11, 2013 article.

If one files a Chapter 7 bankruptcy, then one can also file a Chapter 13 bankruptcy afterwards if he or she so desires. The difference between a Chapter 7 Bankruptcy and a Chapter 13 Bankruptcy is that in a Chapter 7 one “receives a discharge of debt,” meaning that all their “debts have been eliminated” whereas in a Chapter 13, one is on a repayment plan. In this type of bankruptcy, one is given about three to five years to repay their “delinquent mortgage payments,” which go to the trustee who then forwards it to the lender. If one is keeping up with their mortgage payments, then the mortgage lender does not have the right to foreclose on the property and sell one’s home. One needs to be aware that even though one is on the repayment plan for his or her mortgage, he or she still needs to keep up with his or her regular mortgage payments, which may be very difficult.

Also, mortgage lenders might be more willing to work with the borrower on loan modification if the borrower is trying his or her best to keep up with mortgage payments after they filed for a Chapter 13 bankruptcy.

Whether you are behind on your mortgage or are under a pile of credit card and medical debt, bankruptcy may be right for you. Bronx attorney Jayson Lutzky offers free in person consultations to help you decide what is the best way for you to proceed financially. Mr. Lutzky has been practicing law for the past 30 years and is a tough negotiator. Call 718-514-6619 for more information or to set up a free in office consultation. You may visit his website,, to learn more about his services.