S.S.
I am going to guess that they have filed a chapter 13 bankruptcy. A chapter 7 is the other one (and there is chapter 11 which is for businesses). In the case of a chapter 7 bankruptcy an attorney would work with the companies they are in debt to, to lower the total cost of debt and then sell their house and spilt it up to pay off the debt. With a Chapter 13 companies can not seize property or press charges against you IF they are part of the bankruptcy. My husband and I are under a Chapter 13. However we own our house free and clear so I am not sure how house payments figure into it. I can tell you that secured debt actually lowers the payments of a bankruptcy and is allowed to be part of the debt listed. Is it possiable that the house is part of the bankruptcy? If that is the case they are making payments. My car is part of our bankruptcy (my only debt that is even on there) and instead of paying the credit company that gave me my car loan, we payment the bankruptcy trustee one lump payment every month and it gets spilt between our creditors. Bankruptcy is a horriable thing, If we miss a payment they could put a lien on our house and sell it even though we own it free and clear.