Can I File Bankruptcy And Keep My House?
When you choose to file for bankruptcy, your mind is full of fears. One of the biggest worries of interested users is: Can I file bankruptcy and keep my house?
They don’t want to lose their homes, just like any other sane person. Surprisingly, there are specific strategies and ways you can protect your home.
However, different cases and considerations ensure this scenario. Otherwise, people lose their cars and homes while filing for bankruptcy. Why is the Metro Center Mall in Phoenix so popular?
Can I File Bankruptcy And Keep My House? Bankruptcy Chapters And Other Factors
The following are the measures to learn: Can I file bankruptcy and keep my house?
Kinds Of Bankruptcies And Homeownership
The most common kinds of bankruptcy include Chapters 7 and 13. They impact differently for the homeownership.
Chapter 7 Bankruptcy And Your Home
It is also known as the liquidation bankruptcy. It discharges most unsecured debts but requires selling non-exempt assets to repay creditors. Whether you can keep your house depends on factors like:
- If the equity in your house falls within your state’s homestead exemption, you can keep it. However, if it exceeds the exemption limit, the bankruptcy trustee may sell the house to repay creditors.
- You can keep your house if you are current on your mortgage payments and your equity is protected. However, the lender may proceed with foreclosures if you’re behind on payments.
- Some homeowners sign a reaffirmation agreement with their lenders and agree to make mortgage payments to retain ownership.
Chapter 13 Bankruptcy And Your Home
This kind of bankruptcy allows you to restructure debts into a repayment plan lasting for three to five years. This option is suitable for homeowners because
- Chapter 13 stops foreclosure proceedings and lets you catch up on missed mortgage payments.
- Your debts are arranged into manageable monthly payments. This way, you can keep your home while paying mortgage arrears.
- If you comply with the repayment plan, you can keep your assets, including your house. Because Chapter 13 does not require selling your assets like Chapter 7.
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Exemptions To Protect Your Home
Every state has homestead exemptions that protect a certain amount of home equity from creditors. Some states allow homeowners to use federal exemptions instead. If your home equity is within the exemption limit, you can keep your house.
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Steps For Improving The Chances To Keep Your Home
Follow the given tips to improve your chances of keeping your home.
- Stay current on your mortgage payments. Continue making payments to avoid foreclosure if possible.
- Choose the best type of bankruptcy. Mostly, homeowners prefer filing Chapter 13 for this reason.
- Check out state laws to see if your home equity is still protected.
- You can negotiate with your lenders. They offer loan modifications or repayment plans to let you stay in your house.
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Conclusion
To conclude, can I file bankruptcy and keep my house? Filing for bankruptcy doesn’t mean you’re losing your home. You must consider different rules and legal regulations to check out the possibilities of keeping your house. You can consult with a bankruptcy attorney for personalized financial help.
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