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Do I have to keep paying the mortgage payments to the bank after I become bankrupt?

FAQs | Bankruptcy and Your House

Bankruptcy will clear your unsecured debts but not your secured debts. Your mortgage is a secured debt and is not extinguished by bankruptcy.

If you do not wish to keep living at the property you should let your trustee know and he will tell you what you need to do. In this situation, once you have become bankrupt you should stop making the mortgage payments to your bank. Any shortfall or surplus on the mortgage will be captured by your bankruptcy.

If you do wish to keep living at the property, the mortgage debt remains an obligation that you must meet. If you do not keep paying your mortgage the lender has the right to repossess and sell the property at auction. If you wish to save your home, we recommend you read our articles, ‘Can I stay living in my home?’ which can be accessed here. And ‘Your home and bankruptcy’ which can be accessed here.

For further information on bankruptcy, we recommend our articles ‘Pathways to Bankruptcy – Essential Facts’, ‘Life During Bankruptcy’ and ‘The Bankruptcy Option Explained’.

Nicholls & Co have a complementary ‘help desk’ to answer your questions on bankruptcy. Call Nicholls & Co on 1300 060 122 or email

Alan Nicholls - Registered Trustee

Alan Nicholls’ no obligation help desk

Nicholls & Co provide a free, no obligation ‘help desk’ for people considering bankruptcy – we discuss and explain bankruptcy and answer questions for anyone who is considering bankruptcy. The Nicholls & Co help desk can be accessed by phone  
1300 060 122  or . Alan Nicholls, Registered Trustee in Bankruptcy is also available to answer your questions to enable you to decide if bankruptcy is right for you.