Home Owners Insurance After Chapter 7 Bankruptcy


LoanSafe Member

If both the first and second mortgages were discharged back in 2010 under chapter 7, and we have stayed in the home, but quit paying on the second mortgage in 2012 but have kept the first current. Do we need to keep our home owners insurance at an amount to cover both mortgages (even though both charged off)?

Or just enough to cover the first? I am thinking that since we are technically renting the house at this time from the first mortgage holder, but would like to re-fi down the road, that we only need to carry enough insurance to cover the first and personal items.

I have not been able to find any information about Home Owner's insurance for people that have filed BK7, stayed in the house and are current with the first lender. Any info would be great. Also the house in Minnesota.
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LoanSafe Member
Im in similiar situation. Filed and discharged in 2011. Paying first but not paying second.

Bankruptcy question has never come up with homeowners insurance. All I have ever shown insurance company is assessed value from our tax bill. They want coverage to pay for complete loss.

In Michigan, assessed value is one half of estimated market value.

Our home is assessed at $90,000, that puts market value at $180,000. My insurance coverage is $180,000.
I do not believe your homeowner's insurance has anything to do with the amount of what is owed. At least mine doesn't. It covers what it would cost to rebuild/repair the home and replace the personal property if something happened. It also covers liability for injury to others up to the policy limits.

My recommendation is to keep the property insured as suggested by your agent.