Unless you count yourself among those who have filed for personal bankruptcy in the past, you may have numerous questions as you navigate the process and figure out the most effective way to regain control over your finances. Many people filing for bankruptcy for the first time have similar questions, and one of the most common questions they ask if whether they can keep their homes after doing so.
Ultimately, whether you can hang onto your home after a bankruptcy filing depends on several circumstances, among them the type of personal bankruptcy case that you initiate. The amount of equity you have in your home also comes into play when determining whether you may keep your house.
Chapter 7 bankruptcy filings
If you decide to move forward with a Chapter 7 bankruptcy, whether you lose your home depends largely on the amount of non-exempt equity you have in it. If your home winds up qualifying as “exempt property,” you are typically going to be able to keep it. Otherwise, you may need to sell it to pay off creditors. Just how current you are on your mortgage payments may, too, play a role in whether you wind up losing your home.
Chapter 13 bankruptcy filings
Generally speaking, you have a better chance of keeping your home when you file for Chapter 13 bankruptcy than you would if you move forward with a Chapter 7 filing. As long as you stay current on your mortgage and the terms of the repayment plan outlined for you, you are likely going to hang onto your home despite filing for Chapter 13 bankruptcy.
In some instances, it may benefit you to walk away from your home even if you are not necessarily going to lose it through bankruptcy. If your wish is to remain in your home, however, you may have options available that may help you do so.