The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

If I own two homes, can I file bankruptcy and keep one of my homes?

Making the decision to file for bankruptcy is never one that comes easily. Most of the time, it is a last resort for someone who is facing extreme financial hardship related to medical bills, divorce or job loss. For those who own their own homes, it can be difficult to make the determination about whether you want to keep the home or let it go in the bankruptcy. At times, it may be best to just walk away from the homes, but in the event that home is your dream home, it may be best to work out some type of agreement with the mortgage company to keep your home. Regardless of whether you are going to get rid of one home and keep the other, you will need to follow certain steps to secure your property for the long run.

If you already have payments that are behind on the home, the court will place an automatic stay on the property for you. Until that stay is lifted, the mortgage company cannot initiate foreclosure proceedings on your home. Upon removal of the stay, they can proceed to foreclose on your home as normal. If you are planning to keep your home, you will need to follow certain procedures to reaffirm your debt with the mortgage provider.

Your bankruptcy attorney will need to send a letter to the mortgage company specifying that you want to keep your home, set up the payment arrangements and receive financial communication from them. The mortgage company is going to require a few documents to help determine your eligibility for one of the repayment plans they offer to help with your past due payments. You will also need to include a letter of hardship that explains why your payments got behind in the first place. Make sure to outline your current monthly obligations and include a pay stub to prove that your income will allow you to make the necessary payments on your mortgage.

Once the repayment plan is put into effect, you will need to make sure you don?t miss payments or it will void the agreement. Once the past due is paid, you will be able to sign the reaffirmation agreement for your home. In short, you will not have to worry about forgoing your home if you decide to keep it. You are in control of whether you want to give the home to the lender or reaffirm your agreement with them, regardless of how many homes you have.


This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

Recent Bankruptcy & Debt Articles