chapter 7 bankruptcy and mortgage

I'm not sure what the law is in UT, because I am licensed and practice in Georgia. In Georgia, you do NOT have to be current on your mortgage before you can file under Chapter 7. In fact, one of the many reasons why people file for bankruptcy protection is because they are behind on their mortgage payments.

**My response to your post on avvo.com did not create an attorney-client relationship.

In a Chapter 7 bankruptcy you have, at least for purposes of this answer, two options regarding being behind on a home mortgage:

You can either, 1) Get the mortgage current, or 2) You can surrender the home to the lender.

Since you are behind on the monthly mortgage note you may want to see if you qualify to file a Chapter 13 bankruptcy. Under Chapter 13 you propose a Plan to the court which allows you to pay off the back due mortgage over a period of 3 to 5 years.

There are many factors to be considered when determining what type of bankruptcy is best for your current circumstances. You need to consult with an experienced bankruptcy attorney in your area.

The reason why you may have been advised to become current on your mortgage in Utah is likely due to the response you will receive from the lender when you file bankruptcy.

When you are delinquent on your home mortgage, the lender is more likely to attempt to get around the protection of the bankruptcy and resume foreclosure proceedings. The lender can do that because their interest in the home is no longer protected by your regular monthly mortgage payment. While most motions to get around the bankruptcy protection conclude with a note that the lender may also enter modification, forebearance, or other remedial procedures, it reserves the right to continue foreclosure.

You do not HAVE to be current in order to keep your home, but I have found it depends on the lender how they will react to a bankruptcy filing. I have seen some lenders not worry about how far behind the debtor was, while others act very aggressively. The likely reason you were advised to become current on the home before filing was so you were able to keep the home under the protection of the bankruptcy and not risk the lender's attempt to get around the bankruptcy protection.

Aside from that, I agree with the other comments that you can use bankruptcy as a tool to forestall foreclosure and can be a very useful tool in that respect.

Disclaimer: This answer does not constitute legal advice. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in person and in your area before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship. The opinions expressed herein are those of the author only.