Many People Keep Their Homes When They File For Bankruptcy
By Susanne Robicsek, North Carolina Bankruptcy Attorney on Apr 7, 2009 in Featured, General Bankruptcy Information
There is a misconception that people who file for bankruptcy will lose their homes. I hear from many people who avoided speaking to a bankruptcy attorney because ’someone’ told them that if they file for bankruptcy they will lose everything, including their home.
Many homeowners keep their homes in bankruptcy, and many keep their homes because of bankruptcy.
Some people can keep up their mortgage payments better if they don’t have to pay all of their other debts. Chapter 7 writes off certain debts which can free up money to pay for their home. For others, Chapter 13 bankruptcy can provide an affordable repayment plan. Chapter 13 bankruptcy can stop a foreclosure and give people time to catch up missed payments so they can keep the home while reducing or eliminating other debts.
Whether or not you can keep your home after filing for Chapter 7 bankruptcy is a state-by-state question, since what you can keep through bankruptcy varies by the state law controlling the case. However most states protect at least some equity from creditors, whether you are sued or whether you file for bankruptcy. Even if your home is worth more than what is protected under your state exemption laws, there are still ways to keep your home in both Chapter 7 and Chapter 13 bankruptcy.
Don’t rule out bankruptcy because you are scared you are going to have your home taken away. Speak to a bankruptcy attorney near you to find out what property is safe, and how to best keep your home.
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