Can You Keep A House In Bankruptcy?
When you file for bankruptcy, you may be concerned about how it will affect your home and your ability to keep it. Bankruptcy can be a stressful and overwhelming process, but understanding your options and working with a bankruptcy attorney can help you make informed decisions about your home and your financial future. See more of the firm.
There are two main types of bankruptcy that individuals can file for: Chapter 7 and Chapter 13. In Chapter 7 bankruptcy, you may be able to discharge your debts and potentially keep your home, depending on your state’s exemptions and the value of your home. In Chapter 13 bankruptcy, you may be able to keep your home by reorganizing your debts and paying them off over a three to five-year period.
If you file for Chapter 7 bankruptcy and you have equity in your home, the bankruptcy trustee may sell your home to pay off your creditors. However, Texas may have exemptions that allow you to keep some or all of the equity in your home. It is important to work with a bankruptcy attorney to determine what exemptions apply in your case.
If you are unable to exempt all of the equity in your home, you may be able to negotiate with the bankruptcy trustee to keep your home by agreeing to pay the value of the non-exempt equity over time. This is known as a “buyback.” If you are unable to negotiate a buyback, you may be able to keep your home if you can pay off the non-exempt equity within a certain timeframe, usually within a few months.
If you file for Chapter 13 bankruptcy, you may be able to keep your home by reorganizing your debts and paying them off over a three to five year period. In this type of bankruptcy, you propose a repayment plan to the bankruptcy court that outlines how you will pay off your debts. Your repayment plan must be approved by the court, and it must include your mortgage payments. If you are current on your mortgage payments, you will need to continue making them as part of your repayment plan. If you are behind on your mortgage payments, you may be able to catch up on them over the course of your repayment plan.
If you are facing foreclosure on your home, bankruptcy may be able to help you keep your home by stopping the foreclosure process. When you file for bankruptcy, an automatic stay goes into effect that prevents creditors from taking any action to collect debts from you. This includes foreclosing on your home. However, the automatic stay is temporary, and your lender may be able to ask the court to lift the stay if they can show that you are not likely to be able to catch up on your mortgage payments. More here.
If you are considering bankruptcy as a way to keep your home, it’s important to work with a bankruptcy attorney to understand your options and make the best decisions for your financial future. Bankruptcy can be a complex process, and an experienced attorney can help you navigate the process and protect your interests.
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