Is keeping your home in bankruptcy feasible? Whether or not Chapter 7 bankruptcy makes sense will depend on your own individual goals. Some people approach the bankruptcy process by wanting to delay foreclosure, save their house or walk away with less debt. Do you lose your house in Chapter 7 ? The majority of Chapter 7 bankruptcy filers are eligible to keep a house if the payments are up to date.
A few individuals filing for Chapter 7 bankruptcy may not be able to keep their home if they have a large amount of equity the trustee uses to pay the unsecured creditors. For those who walk away from their home, Chapter 7 bankruptcy can push off foreclosure for a limited time. Keeping your home with a Chapter 7 bankruptcy is more reasonable when there is no equity in the house or if you are eligible to protect whatever equity you have inside your home with a homestead exemption.
Consult with an experienced bankruptcy attorney to determine whether or not keeping your home in bankruptcy with the homestead exemption is a possibility for you. If so, the bankruptcy trustee will decline to sell your home since the funds left over would not be substantial.
The majority of individuals filing for Chapter 7 bankruptcy do not have enough non-exempt equity in the home to warrant a sale. This means that the majority of people can keep their home in bankruptcy. To determine whether or not a bankruptcy trustee will sell your home, determine your homestead exemption amount, and determine whether there is enough unprotected equity in your home to warrant a sale. Your bankruptcy lawyer can advise you on whether or not keeping your home is a viable option and explain this process as it can be overwhelming.
Payoff Your Arrears
Chapter 7 can provide some relief from the foreclosure process. However, it will not help you permanently stop the foreclosure or pay off arrears. You may be eligible to work with your lender directly prior to filing for bankruptcy on keeping your home. When you are behind on your mortgage payments, consult with the lender for a formal or informal mortgage work-out. During this, the terms of your loan are refinanced or renegotiated. If you choose this route, make sure that you modified the loan before starting your bankruptcy petition. Otherwise, the bankruptcy could cause problems with any negotiations with your lender.
Keeping Your Home In Bankruptcy With A Mortgage Arrear
If you do have a mortgage arrear and intend on keeping your home, filing for Chapter 13 bankruptcy may be more appropriate for you as you will be able to pay off your arrearage through a bankruptcy process. As with all questions related to keeping your home during a bankruptcy, consulting with an experienced bankruptcy lawyer is strongly recommended if you find yourself in this situation. The right attorney can help give you peace of mind about the process and give you a better perspective on what to expect over the long run.