People who file for bankruptcy have several options when it comes to the house they are making mortgage payments on. In ideal cases, they could have been making regular house payments all along and not have even one late payment. Instead, it is credit card bills or medical bills that have gone unpaid.
In such cases, you may be able to keep your house with no problems finding the money to pay for it. In other situations, other things could happen.
Reduce how much you pay for housing (finding a different place to live)
It could be that you have been making mortgage payments that were barely affordable a few years ago and that are now plain unaffordable. This may not change after a bankruptcy because you will also be paying fees to the bankruptcy trustee. There will also be attorney fees. So, you may have to sell your house and buy or rent a place that costs less.
Alternatively, you could consider methods such as taking in renters to help make ends meet. However, it is unwise to put yourself in a situation where you have to depend on other people to make timely payments. It is best to put yourself in the driver’s seat, and that may mean relocating to a different place.
Keep making payments
If you file for bankruptcy, you might be able to keep making payments on the house or to catch up with payments that you have missed. This approach may be best if the payments are affordable when taken into context with your reorganized debts.
Live in it while you have a few months
A judge might allow a foreclosure to proceed, especially if it is obvious that you cannot supply enough money to bring house payments current. In such cases, filing for bankruptcy can still give you the time to halt proceedings temporarily while you explore options for other living arrangements. It is better than doing nothing and being evicted from your house without having planned your next move.