Your Home & Bankruptcy
How we protect your home in bankruptcy
If you file for Chapter 7 bankruptcy and are current on your mortgage payments, there is a good chance you will be able to keep your home. Some individuals lose there home if there is a great deal of equity, as this may be able to be used to pay off creditors, but it has to be worth more than $75,000, $100,000, or $175,000.00 (see Bankruptcy Exemptions) above what you owe on it for this to even be an issue. If this is the case, your home will not be able to be sold because your home has no value and there will be nothing to pay to creditors.
If you file a Chapter 7 bankruptcy and are past due on your mortgage payments, the mortgage company will eventually request to be removed from the bankruptcy to pursue a foreclosure of the property. Due to this, it is usually not advisable to file a Chapter 7 if you are past due and want to retain the property.
If you file for a Chapter 13 bankruptcy and are current on your mortgage payments, you will want to continue to make the payments on time, either by yourself or through the bankruptcy Trustee.
If you file for a Chapter 13 bankruptcy and are past due on your mortgage payments, you and your attorney will create a payment plan to catch up on the past due payments and property taxes over a period of three to five years, interest free. In addition, you can often eliminate second mortgages from the property. This is a great way to stop a foreclosure and give you a second chance to keep the property, and the mortgage company cannot say no or refuse to accept your payments. You will also start making the regular payments on time, either by yourself or through the bankruptcy Trustee.