Bankruptcy Halts Reverse Mortgage Payments


Dear Ellen, Those crucial payments to you have stopped because borrowers aren’t allowed to access funds, with some exceptions, from their reverse mortgages during bankruptcy proceedings. Filers, not surprisingly, aren’t supposed to take on any new debt under bankruptcy. However, the bankruptcy court or the trustee monitoring the proceedings can approve your request for continued funds through a “reaffirmation agreement” that you mentioned, so by all means give that a try posthaste. And no, the lender typically can’t call the loan due because a reverse mortgage is generally treated like any other debt belonging to the bankruptcy filer.