If I have a first mortgage and also have a construction loan that has not converted to a permanent loan yet, what happens to the construction loan when I file Chapter 13?
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If I have a first mortgage and also have a construction loan that has not converted to a permanent loan yet, what happens to the construction loan when I file Chapter 13?
Can they foreclose on my property?
Asked on May 13, 2014 under Bankruptcy Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
Typicaally, they can foreclose unless you affirm, or agree to keep paying under mutually agreeable terms, the loan; construction loans usually involve giving the lender a security interest, like a mortgage, and if they have such an interest, filing for bankrupty will only delay, not prevent, foreclosure unless you affirm the loan.
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