For many people, a home is so much more than a house, it holds fond family memories, and offers you a safe haven at the end of a long day. So, when even considering bankruptcy, most people’s primary concern is whether or not they will be able to keep their home.
The short and sweet answer is: yes, you will most likely be able to keep your home. Every situation is different, so there are issues that may need to be addressed. However, after filing bankruptcy many people can and do keep much of their property, so it is certainly a viable option.
The type of bankruptcy you file, be it chapter 7 or chapter 13, can play an important role in deciding what property you are able to keep. If you’re behind on your mortgage then a Chapter 13 is usually a good choice. It can also be a way to keep your home if you too much equity to exempt (protect.). However, most of our clients don’t have too much equity in their home and can file a Chapter 7.
When you file, you will want to know how much equity you have in your house. Equity is the market value of the home, minus the balance you owe on your mortgages and home equity loans. If you have little or no equity, you don’t even have to take an exemption to keep your home safe. Each state has their own exemptions, but in California the homestead exemption is $100,000 for families or married couples, or $75,000 for single individuals. If you are at least 65 years old, or are mentally or physically disabled, the exemption jumps to $175,000.
For more information about bankruptcy and your options, contact LeverLaw and schedule a free consultation.