Whether You Keep Property After Bankruptcy

In the extremely uncertain economic conditions of today a great many men and women find themselves in the position of having to ask some very hard questions, like “Can I file for bankruptcy and keep my house?”  Filing for bankruptcy can be a daunting experience for anyone in this day and age but it is even more devastating for those with families and those just trying to hold onto the roof over their heads. Being able to keep your house can be one of the most pressing of issues when deciding not only whether to file for bankruptcy, but also which kind of bankruptcy paperwork you should be filling out.

For those wishing to keep their home while still going through the process of filing for bankruptcy, there are viable options, depending on whether or not your claim meets the criteria for exemption. To have a home that falls under the pre-determined exemption status, the amount of equity will be taken into account as the determining factor. Exempt properties are generally ones that are needed to provide shelter for you and your family and if there is no equity in your home that can be liquidated, then there is no reason for the bankruptcy trustee (the person in charge of liquidating your assets to repay your creditors) to sell it. However, each state has it’s own laws as to what does and does not qualify under the “homestead exemption laws” and it is imperative you seek this information before making your decision as to which kind of bankruptcy you plan to file for.

A Chapter 7 bankruptcy is also known as a “liquidation” bankruptcy.  The trustee overseeing your case will take any equitable assets not covered by the aforementioned exemptions and liquidate them to repay what is owed as expediently as is possible. When filing, be sure to check your state laws concerning property exemptions as they can be quite varied and the property you are able to keep depends heavily on that information.Choosing to file a Chapter 7 bankruptcy may not be the best option as there is no guarantee that your home will fall into exempt status although where you currently stand with your mortgage payments can be a means of making it more likely you will be able to keep your home.

In comparison, when filing for a Chapter 13 bankruptcy, you will be able to not only have access to the typical exemptions offered in the Chapter 7 bankruptcy proceedings, but also be able to keep your home.  Filling out the paperwork for a Chapter 13 will begin a process through which you are expected to repay all – or a portion thereof –  your debts via a structured payment plan that typically spans between three and five years as well as assuring that your creditors will be compensated in an amount equal to what they would have gained had you filed for a Chapter 7 bankruptcy instead.  With a Chapter 13 filing you are also expected to keep up with pre-existing mortgage payments to keep your home.

So when asking yourself “Can I file for bankruptcy and keep my home?” it’s best to remember that there are different options, exemptions and rules that help to make it possible, as long as you are willing to put in the effort and research needed.  A good bankruptcy attorney can sometimes be the difference between keeping your home and having to let it go because your debts exceed its projected value, even if your home would otherwise be exempt from liquidation.

Arnold & Smith Attorneys at Law
200 North McDowell Street
Charlotte, NC 28204


Jeffrey B.Peltz, P.C.
26 Court Street, Ste. 503
Brooklyn, New York 11242
Telephone: (718) 625-0800