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A Chapter 7 bankruptcy wipes out your financial debt, including your mortgage, but you could lose your house. A Chapter 13 bankruptcy is more of a reorganization, and you can even catch up on payments as long as these are included in your plan.
Though Chapter 7 stays on your report for up to 10 years, the debt you discharge may go away sooner. That's because most negative accounts fall off your report seven years or so after any final payment or activity. But some Chapter 13 debts may show up on your report after the bankruptcy drops off.
In most cases, your personal liability to pay your mortgage was discharged at the end of your Chapter 7 bankruptcy. That means if you fail to pay, the lender can forclose but isn't allowed to come after you for the deficiency after the foreclosure sale. It means you owe $0 on your mortgage.
Types of debt that cannot be discharged in bankruptcy include alimony, child support, and certain unpaid taxes. Other types of debt that cannot be alleviated in bankruptcy include debts for willful and malicious injury to another person or property.
The Chapter 7 Discharge. A discharge releases individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor.