If you are struggling to pay off mounting debts and can never seem to make a dent, you are likely considering bankruptcy as an option for wiping the slate clean. You may also be wondering if it is possible to protect your home during this process. Continue reading to find out if you can keep your home while filing for bankruptcy.
Protecting Your Home During a Bankruptcy
How you protect your home will depend on the chapter you file. For example, if you are filing for a Chapter 7, bankruptcy, you will have to be current on your mortgage payments and protect your home’s equity with a bankruptcy exemption. On the other hand, if you are filing for a Chapter 13 bankruptcy, you will have the opportunity to catch up on any mortgage payments you miss, so you can keep your home.
For many, filing a Chapter 7 bankruptcy is usually a more appealing option because it is the simplest path toward restoring financial stability.
If this is the chapter you plan on filing, you can keep your house if you meet the following criteria:
- You are current on your payments
- You will continue to make payments in the future
- You can protect the equity in your home with a bankruptcy exemption
If you are behind on your payments or if you have a lot of equity in it, however, it will be exceptionally more difficult to protect it since it is more likely the bankruptcy trustee will sell it to pay off creditors.
If you are filing a Chapter 13 bankruptcy and you are behind on your mortgage payments, there are some mechanisms that will allow you to get caught up:
- You can propose a repayment plan, allowing you to pay off your creditors over the next 3 to 5 years. Your mortgage will be treated as a separate debt, which will be added to your repayment plan.
- Using this method will only work if you have the income to make regular payments, so you will have to show sufficient income.
When you are in the process of a Chapter 13 bankruptcy, the mortgage holder cannot foreclose if you continue making your mortgage and plan payments on time.
Schedule a Free Consultation with an Experienced Bankruptcy Attorney Today!
If you are filing for bankruptcy, the bankruptcy team at Haven Law Group, P.C. can help you protect your home. We have the knowledge and extensive experience necessary to guide you through this process, so do not hesitate to reach out to us.
Call our law office today at (757) 209-2167 to set up a free case review with one of our attorneys.