Can you keep your house if you file bankruptcy?

**Can you keep your house if you file bankruptcy?**

Filing for bankruptcy can be a daunting and overwhelming process, often causing fear and uncertainty about the future. One of the most common concerns individuals have when considering bankruptcy is whether they will be able to keep their house. While the answer to this question depends on several factors, it is possible in many cases to keep your house even after filing for bankruptcy.

1. What type of bankruptcy should I file to keep my house?

The two most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. Under Chapter 7, your non-exempt assets may be sold to pay off debts, but exemptions exist to protect your property, including your home. Chapter 13, on the other hand, allows you to keep your assets and create a manageable repayment plan.

2. Can I keep my house if I file Chapter 7 bankruptcy?

Yes, you can keep your house if you file Chapter 7 bankruptcy, as long as you are up to date on your mortgage payments and the equity in your house does not exceed the available homestead exemption in your state.

3. How does Chapter 13 bankruptcy affect my house?

Chapter 13 bankruptcy enables you to keep your house and catch up on missed mortgage payments through a repayment plan. This can provide a solution for individuals who have fallen behind on their mortgage but want to keep their home.

4. What is a homestead exemption?

A homestead exemption is a state-specific law that allows homeowners to protect a certain amount of equity in their primary residence from being seized to repay debts during bankruptcy proceedings.

5. How much equity can I protect in my house?

The amount of equity you can protect in your house varies depending on your state’s homestead exemption. Some states have unlimited homestead exemptions, while others have a specific dollar amount.

6. Can I keep my house if I’m behind on my mortgage payments?

If you’re behind on your mortgage payments, Chapter 13 bankruptcy may allow you to keep your house by creating a repayment plan to catch up on the missed payments over time.

7. What happens to my mortgage if I include it in bankruptcy?

Including your mortgage in bankruptcy eliminates your personal liability for the debt, stopping foreclosure proceedings. However, if you want to keep your house, you still need to make mortgage payments.

8. Can filing bankruptcy prevent foreclosure?

Yes, filing bankruptcy can put an automatic stay on foreclosure proceedings. It provides a temporary halt, giving you an opportunity to either catch up on missed payments or create a repayment plan to resolve the outstanding mortgage debt.

9. Can I sell my house while in bankruptcy?

Yes, you can sell your house while in bankruptcy. However, you will need court approval and must adhere to specific procedures to ensure the proceeds are used appropriately and debts are addressed.

10. Will I lose my house if I file bankruptcy and have a second mortgage?

In some cases, if the value of your house is less than the balance of your first mortgage, you might be able to eliminate the second mortgage lien through a process called lien stripping in Chapter 13 bankruptcy.

11. Can a bankruptcy trustee force the sale of my house?

The bankruptcy trustee can only force the sale of your house if the sale will generate significant proceeds that can be used to repay your creditors. In most cases, exemptions protect your home from being sold.

12. Should I consult with a bankruptcy attorney?

Yes, it is highly recommended to consult with a bankruptcy attorney who can assess your specific situation, guide you through the process, and help you make informed decisions about your house and other assets.

In conclusion, while filing for bankruptcy can be an intimidating process, it is possible to keep your house by understanding the specific bankruptcy laws in your state and leveraging exemptions and repayment plans. Consulting with a bankruptcy attorney can provide invaluable guidance to help you through this challenging time and ensure the best outcome for your financial future.

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