In a Chapter 7 bankruptcy, it is possible that you could lose your home if you are unable to get caught up on your mortgage or if you have significant equity in your home that is not protected by bankruptcy exemptions. When you file for Chapter 7 bankruptcy, you must list all of your assets, including your home, on your bankruptcy petition.
The bankruptcy trustee will then determine whether any of your assets are non-exempt, meaning that they are not protected by bankruptcy exemptions and could be sold to pay off your debts. If you have significant equity in your home that is not protected by exemptions, it is possible that the trustee could sell your home to pay off your creditors. This is why it is a good idea to speak with a local Prattville bankruptcy attorney, or an attorney where you live, before filing.
However, it is important to note that bankruptcy exemptions vary from state to state, and the amount of equity that is protected by exemptions can also vary based on your circumstances. In some states, you may be able to protect a certain amount of equity in your home, or you may be able to use a wildcard exemption to protect additional equity.
In addition, even if you do not have enough exemptions to protect your home from being sold, you may still be able to keep your home if you can pay off the mortgage through a Chapter 13 bankruptcy repayment plan. In a Chapter 13 bankruptcy, you are required to pay off a portion of your debts through a repayment plan that typically lasts three to five years. The amount that you are required to pay is based on your disposable income, as well as the value of your assets and the types of debts that you owe. If you have a regular income and assets that are not protected by bankruptcy exemptions, you may be required to pay a significant portion of your debts through a Chapter 13 repayment plan.
It is also worth noting that if you are behind on your mortgage payments and are facing foreclosure, a bankruptcy lawyer in Montgomery, or wherever you live, may be able to help you file for bankruptcy and get caught up on your mortgage to avoid losing your home. If you file for Chapter 7 bankruptcy and can catch up on your mortgage through a Chapter 13 repayment plan, you may be able to keep your home.
If you are considering filing for bankruptcy and are concerned about losing your home, it is important to speak with a bankruptcy attorney in Alabaster to understand your options. A bankruptcy attorney can help you understand the bankruptcy process, including the bankruptcy exemptions that apply in your state and can help you determine whether you have the financial means to pay off your debts and keep your home.
Attorney Steven A. Harris regularly blogs in the areas of family law, bankruptcy, probate, and real estate closings on this website. Mr. Harris tries to provide informative information to the public in easily digestible formats. Hopefully you enjoyed this article and feel free to supply feedback. We appreciate our readers & love to hear from you!