Can You File for Bankruptcy in NJ with a Reverse Mortgage?
Filing for bankruptcy can seem intimidating to debtors, especially if they also have a reverse mortgage. Our attorneys can help you navigate bankruptcy so that you don’t your reverse mortgage agreement is unaffected.
In many cases, debtors can file for bankruptcy in New Jersey if they also have a reverse mortgage. However, it is important for debtors to understand the risks of doing so. Our attorneys can determine which type of bankruptcy you are eligible to file for based on the amounts of your regular reverse mortgage payments. To ensure you do not risk losing your home while under bankruptcy with a reverse mortgage, reach out to our lawyers if you are struggling with overwhelming debt and need help in New Jersey.
We’re here to help you eliminate debt through bankruptcy, even if you have a reverse mortgage. For a free case evaluation with the New Jersey bankruptcy lawyers at Young, Marr, Mallis & Associates, call today at (609) 755-3115.
Can You File for Bankruptcy if You Have a Reverse Mortgage in New Jersey?
Filing for a reverse mortgage can help you supplement your income and remain financially stable in your retirement. Unfortunately, if other bills and expenses have begun to pile up and become overwhelming, you may be at a loss for what to do. If you are struggling with debt, contact our Trenton bankruptcy lawyers. You may be able to file for bankruptcy despite having a reverse mortgage.
A reverse mortgage is a financial agreement between a homeowner and a lender. Essentially, a homeowner will release a certain amount of equity in their home to a lender in exchange for regular payments. Often, seniors and those nearing retirement opt for a reverse mortgage to have a reliable stream of income as they age.
In some cases, reverse mortgages can complicate bankruptcy. While many people can file for bankruptcy even with a reverse mortgage in New Jersey, the process can be complex. Contact our attorneys if you need help regaining your financial stability and eliminating debt. Although the terms of your reverse mortgage may enable you to file for bankruptcy with minimal risk, it is still important to ensure that your assets and reverse mortgage payments will be unaffected throughout the process.
What Happens to Your Reverse Mortgage Payments When You File for Bankruptcy in New Jersey?
Filing for bankruptcy can be a smart choice for people dealing with overwhelming debt in New Jersey. However, it is important to understand what happens to your reverse mortgage when you are under bankruptcy so that you are sufficiently prepared to meet the requirements of a possible repayment plan.
Most likely, your reverse mortgage payments will temporarily stop when you file for bankruptcy in New Jersey. Depending on the type of bankruptcy you file for, whether Chapter 7 or Chapter 13, it may be some time before your debt is eliminated. To ensure you can support yourself during that time, you should have sufficient savings or other income streams. Because many people who opt for a reverse mortgage are retired or near retirement, and their reverse mortgage payments may be their primary source of income, saving is essential.
Chapter 13 bankruptcy works via repayment plans and can take several years. In order to meet your payment dates to creditors, it is important that you have sufficient savings or income outside of your reverse mortgage payments. Remember, you will likely not receive any reverse mortgage payments while you are under bankruptcy, so speak with our Piscataway bankruptcy lawyers to learn how to prepare.
Can Your Reverse Mortgage Payments Make You Fail the Means Test for Bankruptcy in New Jersey?
Regardless of whether you file for Chapter 7 or Chapter 13 bankruptcy in New Jersey, you will have to pass a means test. Depending on the size of your reverse mortgage payments, your options for which type of bankruptcy you file may be limited.
In order to file for Chapter 7 bankruptcy, you cannot earn a significant income. Chapter 7 is a liquidation bankruptcy. Instead of debtors paying back creditors through a repayment plan, debtors’ assets will be liquidated. Earning too much from reverse mortgage payments may disqualify you from filing for Chapter 7 bankruptcy in New Jersey.
The opposite can be said for those who wish to file for Chapter 13 bankruptcy with a reverse mortgage in New Jersey. In order to be eligible for Chapter 13 bankruptcy, debtors must earn sufficient income. If you do not earn enough from your reverse mortgage payments, and if that is your only source of income, you may not have sufficient income to meet the requirements of a repayment plan.
Our Mount Laurel bankruptcy lawyers can determine which type of bankruptcy you can file based on your reverse mortgage payments and other income. Then, our attorneys can help you enter bankruptcy and address any debt you may have so that you can regain your financial stability.
Is Your Home in Jeopardy if You File for Bankruptcy in New Jersey with a Reverse Mortgage?
Depending on the type of bankruptcy you can file for in New Jersey, your home might be at risk if you have a reverse mortgage. Our attorneys can protect your home so you can exit bankruptcy debt-free while retaining certain assets.
Because Chapter 7 bankruptcy works through liquidating your assets, your home might be at risk if you have a reverse mortgage. This depends on how much equity in your home you have relinquished and how much equity you still retain. Certain reverse mortgage agreements have a caveat that allows a lender to take a person’s home should they file for bankruptcy.
Our New Jersey bankruptcy lawyers can assess your current reverse mortgage agreement to ensure you don’t lose your house when trying to eliminate debt. Because Chapter 13 bankruptcy does not work via liquidation, there is less risk to debtors with reverse mortgage agreements.
Ask Our New Jersey Lawyers About Filing for Bankruptcy Today
If you need to file for bankruptcy and have a reverse mortgage, our attorneys can help. For a free case evaluation with the Marlton, NJ bankruptcy lawyers at Young, Marr, Mallis & Associates, call today at (609) 755-3115.