{"id":497,"date":"2013-01-22T18:33:16","date_gmt":"2013-01-22T18:33:16","guid":{"rendered":"https:\/\/mn-bankruptcy.com\/blog\/?p=497"},"modified":"2025-08-11T19:14:35","modified_gmt":"2025-08-11T19:14:35","slug":"creditors-may-be-able-to-garnish-the-payments-from-a-reverse-mortgage","status":"publish","type":"post","link":"https:\/\/mn-bankruptcy.com\/blog\/creditors-may-be-able-to-garnish-the-payments-from-a-reverse-mortgage\/","title":{"rendered":"Seizure of Payments from a Reverse Mortgage"},"content":{"rendered":"

I’ve always been reluctant to accept a bankruptcy case where the Debtors have a reverse mortgage.\u00a0 When I review the paperwork involved with the reverse mortgage, it looks to me as if the homeowners are transferring a bit of the ownership of their home to the mortgage company every month.\u00a0 I have always wondered if that would be considered a fraudulent transfer by a bankruptcy trustee.<\/p>\n

<\/div>\n

Now today I’ve learned, perhaps a bit late, that a New Jersey court is saying that the payments from a reverse mortgage can be garnished by creditors.\u00a0 That’s an idea I never thought of, but I am concerned that it might catch on.\u00a0 In a bankruptcy context this could mean that if a person with a reverse mortgage was to file a Chapter 7 bankruptcy, the bankruptcy trustee would be able to seize all the remaining payments on the reverse mortgage.\u00a0 The trustee could keep the file open and collect the money from the reverse mortage until all the unsecured debts and all the administrative expenses were paid.\u00a0 This is a frightening prospect.<\/p>\n

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\n

When I see those TV commercials for reverse mortgages I cringe.\u00a0 Seems to me that the advertising is misleading.\u00a0 The folks I’ve met who have reverse mortgages don’t seem to have much of an understanding of what they got themselves into.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

I’ve always been reluctant to accept a bankruptcy case where the Debtors have a reverse mortgage.\u00a0 When I review the paperwork involved with the reverse mortgage, it looks to me as if the homeowners are transferring a bit of the ownership of their home to the mortgage company every month.\u00a0 I have always wondered if … <\/p>\n

Continue reading “Seizure of Payments from a Reverse Mortgage”<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[12,162],"tags":[125,163,164],"class_list":["post-497","post","type-post","status-publish","format-standard","hentry","category-chapter-7","category-reverse-mortgage","tag-chapter-7-bankruptcy","tag-garnishment-2","tag-reverse-mortgage-2"],"yoast_head":"\nSeizure of Payments from a Reverse Mortgage - Better Call Dave - Bankrupt MN Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/mn-bankruptcy.com\/blog\/creditors-may-be-able-to-garnish-the-payments-from-a-reverse-mortgage\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Seizure of Payments from a Reverse Mortgage - 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