Filing Bankruptcy will affect your Home Mortgage loan, payments and Credit Reporting.
How does filing bankruptcy affect my home mortgage loan?
One you file, the bankruptcy stay becomes effective stopping all collection activities from every creditor, including your Home Lender from collecting Mortgage payments. This bankruptcy stay includes even those types of debt that may not be dischargeable such as the IRS and student loans. So How does this affect your home mortgage loan and mortgage payments?
Any automatic payments setup online or that use the ACH system will be terminated and even rejected by the mortgage bank. Payments should be made directly to the bank and banks will provide an address to send in payments. In some cases you may be able to sign a consent or authorization form with the mortgage bank allowing you to setup a new automatic payment.
The bank will not provide monthly statements or allow online access to your account after bankruptcy. In some cases lenders will restart statements, if you and/or your attorney sign a consent or authorization form. If your bank has stopped online access, you must mail your payment to the address specified by your bank. If you are unable to obtain regular statements, you should request a payment history now and again to make sure your payments are properly credited.
If your attorney authorizes the bank with a consent form, your mortgage lender may communicate loss mitigation options to get you back current or lower your payment. A loan modification does not require you to re-affirm the mortgage and may help save your home without re obligation yourself to the loan.