Expert: Terry Leeders - 7/6/2007

Question
We have a 1st, 2nd, and 3rd mortgage and can no longer afford the house.  Our income is too high for chapter 7 and we most likely would file chapter 13.  If we surrender the house during BK, is this considered a foreclosure?  Finally if the bank sells the house and it does not sell for the total amount owed, will the remaining unpaid balance be rolled into our payment plan or will it be discharged by the judge?


Answer
Usually, the bank will foreclose, but the chapter 13 bankruptcy will trump it, discharging any further liability on the claim if you set up your plan correctly.  Therefore, you should speak to an experienced chapter 13 bankruptcy attorney to help assist you.