Friday, February 17, 2012

Is Bankruptcy possible with a reverse Mortgage?

Bankrate's reader, John, submitted a question worth re-posting. He asks, 

"If somebody has a reverse mortgage, could he file for bankruptcy and still keep the house -- of course meeting all the other obligations to the mortgagor?"

-Firstly, Justin Harelik of Bankrate.com suggests to consider three points; home value, current balance and monthly payments. When considering bankruptcy with a reverse mortgage, make sure you can protect or exempt whatever amount of equity you currently have in your home. Hiring an appraiser is the most efficient way of acquiring that amount.
-Secondly, even on a reverse mortgage, you must find the current balance of your home. Mr. Harelik suggests requesting a "10-day payoff" from the lender which should show the current balance. This information will be required for the bankruptcy paperwork.
-Lastly, the monthly payment point comes into play and may reduce or remove the need for bankruptcy at all depending on your situation. You will need to review the loan documents to figure out if you will still have access to the monthly distributions or the home's equity.

 In conclusion, the article outlines that if you find the answers for your situation, you may well be able to file a bankruptcy and keep your home. Once you have the researched these three key points, contact our fresno bankruptcy attorneys at the Law Office of Timothy C. Springer for a free consultation.


Original article posted at Bankrate.com

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