Making the decision to declare bankruptcy is a challenging process—especially when it can jeopardize the ownership of your property. If you are thinking about declaring bankruptcy but you are worried about what might happen to your home, there are various options that can help you keep your house.
There are two different types of bankruptcies you can file for, such as Chapter 7 and Chapter 13. With chapter 7, you ask the bankruptcy court to discharge most of the debt you owe. Chapter 13 bankruptcy is available to individuals with debts under an established maximum value that is able to repay over time. While Chapter 7 discharges qualifying debt altogether, Chapter 13 simply allows individuals a longer period of time to make payments in smaller amounts.
Keeping Your Home in Chapter 7 Bankruptcy
Since Chapter 7 discharges most of your debt in a shorter amount of time, it is a much stricter and less flexible process. Although filing for Chapter 7 bankruptcy can be less flexible when it comes to saving your home, there are still options available to you. You may be able to keep your house if you meet the following conditions:
- You have the ability to make your house payments
- You protect your home equity with a bankruptcy exemption
- You have little or negative equity in your house
Keeping Your Home in Chapter 13 Bankruptcy
If you are behind on your mortgage payments, Chapter 13 might give you the time to catch up while still keeping your house. The court gives you a three to five-year payment plan to repay past-due mortgage accounts along with current payments. This plan can be expensive, and you will have to demonstrate that you have enough income to pay all amounts required in your plan. But if you have the ability to make the payments, it gives you flexibility to repay your debt while keeping your house.
Contact A Bankruptcy Attorney: (817) 576-1889
Filing for bankruptcy can be confusing, especially when you want to keep your most important assets. An experienced bankruptcy attorney can explain the different options for your case, so you can keep your home. Huebner Law Firm has helped hundreds of families recover from their difficult financial situations. Contact us today!