If I File Chapter 7 Bankruptcy, Can I Still Keep My House?

Friday 5th of October 2012 01:44:15 AM

If you are considering filing Chapter 7 bankruptcy Glendale, you are probably asking, “Can I keep my home in bankruptcy?” The answer to that is varied, depending on your personal situation.

Exemptions & Equity

The first thing to know is what your home equity is, and what state homestead exemption you qualify for. When you file for bankruptcy, lenders will want to know if you have any built up home equity (or value) that can go towards paying off your debts by selling the home. However, when filing bankruptcy you can also apply for state homestead exemption, so a certain amount that your home can be worth that is exempt from being used to pay off your debt. Be sure to find out the details  so that you can calculate if you have any non-exempt home equity. If it is, your home will likely be sold off (while leaving you with the state exemption amount). This will influence which of the following options you may want to look into when filing for bankruptcy:

If you are behind on mortgage payments, there are several paths you can take:If you’d like to work towards trying to keep your home, you may opt for a loan modification. This should be done before filing bankruptcy and will allow you to renegotiate your mortgage to a level where you can once again stay up to date on payments and not face foreclosure.If you are facing foreclosure because of being behind on your mortgage, when you file for bankruptcy any foreclosures can be given what is called an automatic stay. This will freeze the foreclosing process for a time, while also freeing you from paying the mortgage as you have filed for bankruptcy.If you are keeping up with your mortgage payments, here are your options: Reaffirm the loan. While Ch. 7 bankruptcy basically erases your responsibility for a home loan, if you do not file for reaffirmation the mortgage company will only let you stay in the home as long as you stay up to date with payments. Reaffirmation gives you more options should you get behind on payments.If you are up to date and your home does not have any non exempt equity, you can easily keep your home while also freeing you from debts when you file for bankruptcy. Consult a professional and discuss all options  in detail!  You may reach us at 888-607-7460.

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