Who do you pay your mortgage to if your lender is bankrupt

When you have a mortgage loan, you have a contract that requires you to make monthly payments to repay the mortgage loan. However, what happens when your lender is having financial trouble and they end up going bankrupt?

The answer is simple, the mortgage payment is made to a successor. As a debtor, you still have an obligation to repay the loan. But you still need to know who to pay. This is important information to know and the information can easily decide what you need to do.

Pay The Debt Successor

When a mortgage company files for bankruptcy, it will have debts of its own to pay and they will ensure that they are paid. When it comes to your mortgage, it is considered a debt that the mortgage lender has. When a trustee is designated, they could attempt to collect the mortgage in order for the debts to be settled. You may be contacted by a trustee, who can easily allow you to continue making monthly payments.

However, there may be instances where your debt was sold to another agency for cheap. Regardless, a notification would be sent to you stating how much you currently owe. When you get this notice, it is important to be in contact with them so that you have no problems with your house payments.

Payments May Cease

When you do not receive a notification, then it would be a good idea to get in touch with your current mortgage provider to see who the payments are to be sent to.  The creditor should be able to supply you with the contact information. When there is no contact or if you receive no answer from the original mortgage lender, then you could stop making payments.

Although the debt still needs to be paid, if the statute of limitations expires, then repayment may not have to be done. It is important to contact your state to determine the amount of time that can pass for a mortgage loan. Make sure that the time has lapsed before contacting the lender or sending another payment so that you are protected.

A Lien May Occur

When a mortgage lender goes bankrupt, a lien may occur due to the mortgage being a type of secured loan. In order to satisfy the lien, it will require you to repay the loan over time. The lien must also be repaid prior to refinancing or selling of the home.

Payments Will Continue

When a large financial institution is facing bankruptcy, they will likely be bought by another bank, which would just cause a merger. This merger will not have any impact on your mortgage and the need to know who to pay.


When you are aware of your mortgage lender going bankrupt, it does not mean your debt no longer exists. In fact, you are still obligated to make the payments to the designated party. If your mortgage lender has filed for bankruptcy, then you need to get a hold of us today to weigh your options so that your mortgage can continue to be paid on time.

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