Expert: Mark J. Markus- California Bankruptcy Attorney - 9/12/2007

Question
QUESTION: how do you  save your home while trying to reaffirm the agreement, but your
income barely covers the bills?  Do the judge allow you to keep your home in
a chapter 7, if you are considered to be under the  undo hardship, but choose
to try to make your mortgage payments. will the court actually allow you to
lose your home and be homeless, when the mere reason to go bankrupt is to
save your home? How do you over come this situation, and save your home
by pleading your case to the judge?

ANSWER: I'm not sure I understand your questions or facts.  Whether you can keep your home depends on a number of factors, including 1.  the equity in your home and the exemptions available under applicable State law, and 2. whether you are able to maintain your contractual mortgage payments. If you are behind on your mortgage payments and wanting to use bankruptcy to catch up on those payments, Chapter 7 is not going to help you.  Chapter 13 would be what you need, but again, I'm not clear on what your actual facts are.

---------- FOLLOW-UP ----------

QUESTION: i have a chapter 7 pending. I am trying to reaffirm my mortgage, and it that if
the judge find that my income is under the undo hardship, it can be denied.  let
say my income is 1500.00 monthly, and my monthly bills are 1200.00, can I
keep my home?  I am not behind on my mortgage, and I stay in Virginia.  Do you
think that I would be able to keep my home with the income that I receive? Will I
pass the undo hardship.

Answer
Unless Virginia has some laws of which I'm unaware, a mortgage does not need to be reaffirmed.  You just continue making the payments.   If you are showing a $300 monthly surplus in your budget, as you indicate, that might be grounds for dismissal of your chapter 7 case (or you can convert to Chapter 13 and do a repayment plan).  That has nothing to do with your mortgage though.  You really need to discuss these issues with your bankruptcy attorney.