I HAVE A MORTGAGE CHARGE. WHAT IS A CHARGE
AND DOES IT AFFECT MY BANKRUPTCY CASE?
Charges do not automatically go away
in bankruptcy; a bankruptcy discharge does
not extinguish a charge on property.
A charge is a claim by your creditor against
some specific item of your property. The property
guarantees payment in the event that you fail
to make the required payments. A mortgage
charge gives the creditor the right to force
the sale of your property (called “collateral”)
which you have pledged as security for your
home equity loan. Your home may be subject
to more than one charge (e.g. a “second” mortgage).
If you fail to make payments, the creditor
may enforce its right by taking the property,
or foreclosing, in order to get paid off.
Bankruptcy does not block that foreclosure
sale (see our discussion below on the effect
of bankruptcy on foreclosures).
If you do nothing, you are still responsible,
the charge is not cancelled, and you return
to the same position as if no Bankruptcy Order
had been made (i.e. the creditor can repossess
or foreclose). |
