Can I Keep My Home After Bankruptcy?
It’s an essential question and one that thousands of homeowners ask every year. Filing for bankruptcy temporarily halts foreclosures until the bankruptcy is finished being processed. Filing for bankruptcy is not a quick fix for foreclosure, though. The decision to file needs to be well-informed and thought out.
Keeping Your Home After a Chapter 7 Bankruptcy
During a Chapter 7 bankruptcy, all nonexempt assets are liquidated (sold) and the proceeds go straight to your creditors. Your home is generally considered exempt unless there is significant equity on it. If there is little, no, or negative equity on your home, liquidating it wouldn’t produce any money with which to pay your creditors and would therefore be useless. If your home has equity, it still may be considered exempt under the Homestead Exemption.
Keeping Your Home After a Chapter 13 Bankruptcy
It is usually easier to keep your home under a Chapter 13 bankruptcy than under a Chapter 7. A strict monthly payment plan to your creditors is agreed upon and you’ll pay that for three to five years. Because you’re actively making payments to your creditors, your assets are not touched. If you’re behind on your mortgage payments while filing, your delinquent fees are rolled into the payment plan. This gives you up to five years to catch up on your mortgage payments.
Is bankruptcy the right decision?
Filing bankruptcy solely in an effort to keep your house is not advised. If you find yourself struggling to make your monthly mortgage payments, we urge you to speak with a knowledgeable bankruptcy attorney to discuss the options available to you.
If you’re considering filing for bankruptcy or are worried about defaulting on your home loan, please contact the Clermont bankruptcy attorneys at Boyette, Cummins & Nailos. We offer a free consultation* so you can come in, talk to us, and we’ll come up with a plan together to get you back on the path to financial freedom. We’ve helped thousands of clients like you get through bankruptcies and find their way to a better future and sometimes we’re able help clients avoid bankruptcy altogether.
To schedule your free consultation*, give us a call today at 855-LAW-2020.