In Bankruptcy, who gets the money?

Question

My mother holds the mortgage on my house. I am sooo deep it's pathetic... If I stop paying my credit cards (approx 7K monthly) and file bankruptcy will my mother get her money first if I sell my house?

Answer 1

1. You don't have to sell your house if you file bankruptcy.
2. The original holder of the lien gets first chance at any proceeds from the sale of the asset.
3. Any mechanical liens get second shot.
4. Any thing left goes to pay off unsecured debits (credit cards)
5. If all you owe is credit cards and your house is your primary source of residency they cannot come after you for the home. Odds are that you are so upside down in the home that you have no equity in it.
6. You need to talk to an attorney. Most offer a free initial session.

Answer 2

For financial and credit subject I was search for solutions at this site: QUOTEQUOTING.NET-

RE In Bankruptcy, who gets the money?

My mother holds the mortgage on my house. I am sooo deep it's pathetic... If I stop paying my credit cards (approx 7K monthly) and file bankruptcy will my mother get her money first if I sell my house?

Answer 3

First, don't do this to your mother or to yourself.

You have some options....Sell the house outright

OR

simply deed it over to you mom via special warranty deed since she holds the mortgage anyway. This is very cost effective and easy to do. If this is your homestead, a BK can tie up the property, but I'm not an attorney, so seek counsel if you don't like either of these options but do so prior to moving forward.

Answer 4

You don't have to include your house in your bankruptcy at all. However, laws likely have changed since I filed (10 years ago). But, yes, the holder of the lien on the property gets paid before all others.

Answer 5

The bankruptcy laws have changed recently and it is not so easy as it used to be to just go bankrupt to get out of paying back what you owe. You would have to talk to a lawyer about that.

However, I am fairly sure that your house cannot be taken from you, and you can keep one car per person in your family. Your mom, as mortgage holder, would be out of luck if you were allowed to go bankrupt, you would not have to pay her back.

Answer 6

Generally the money goes to the person named on the deed.
It does seem if you paid a portion, lets say 60%, of the house payment, then you should be entitled to 60% of the proceeds. Maybe your mother will agree on something like this.

Answer 7

Since the house is collateral for the mortgage, your mother should get her money first.