File Bankruptcy and Keep Your House

This is one of the major worries that most people have when they are considering filing for bankruptcy. For most people the answer will be yes, you can keep your house, if you file for bankruptcy. Of course the answer can vary depending on a number of factors that have to be taken into consideration. Below are the most common scenarios that I have encountered with my clients:

• No Equity in Your Home and You Are Current on Your Mortgage Payments - If you are current on your mortgage payments and there is no equity in your home then you should be able to keep your home. As long as you continue to make your monthly mortgage payments, you should not lose your home, even if you file for bankruptcy.
• There is No Equity in Your Home, But You Are Not Current On Your Mortgage Payments- If you are not current on your mortgage payments and want to file for bankruptcy then the best option is to file for Chapter 13 bankruptcy. In a Chapter 13 bankruptcy you can propose to pay back any past due amounts on your home over a 36 to 60 month plan. By filing for Chapter 13 bankruptcy you can propose a payment plan that will pay back your past due mortgage payments, and will allow you to keep your home. This is a good option for people who are facing foreclosure since filing for bankruptcy before your sale date will stop the foreclosure of your home. If you are considering filing for bankruptcy and are facing foreclosure the best option is to sit down with bankruptcy or foreclosure attorney to ensure that you qualify for Chapter 13 bankruptcy.
• There is Equity in the Home and Your Are Current on Your Mortgage Payments - If you are current on your mortgage payments but have equity in your home then you have to make sure that your state bankruptcy exemptions can protect the equity in you home. Bankruptcy exemptions provide a list of assets that a creditor cannot touch, even if you file for bankruptcy. If your state bankruptcy exemptions protect the equity in your home then you should be able to file for bankruptcy and keep your home. If your state bankruptcy exemptions do not protect the equity in your home then you can also consider whether you qualify for a Chapter 13 bankruptcy. Filing for Chapter 13 bankruptcy when you have equity in your home that is not protected can help you keep your home. Here is an example of how this works:Example: If you have a home that is worth $300,000 and the outstanding mortgage is $200,000, then you have $100,000 in equity. Lets assume your a single person with no family that is living in California and is age 40. In California the bankruptcy exemptions would allow you to protect $50,000 in equity in your home. (Keep in mind that how much can be protected will vary with household, age, and income in some cases). You have $50,000 in unprotected equity. In order to keep your home you would try to file for Chapter 13 bankruptcy. Lets assume that the $50,000 equity is the only amount that is not protected in your bankruptcy. In order to keep your home you would have to at least be able to pay your unsecured creditors $50,000 over a 36 to 60 month plan (plan time depends on income). As long as you made $50,000 in total payments to your unsecured creditors, you would keep you home

The fear of losing your home should not stop you from considering bankruptcy as an option. Before deciding what is your best course of action, you should consult with a bankruptcy or foreclosure attorney to understand and evaluate your options. You may be unaware of some valuable options that may ultimately help you keep your home.

Temecula Bankruptcy and Riverside Bankruptcy Attorneys.