Can You Keep Your House After Filing for Bankruptcy?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 15, 2021

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While bankruptcy is designed to help you get relief from financial stress, it is typically not an easy process and there are many tradeoffs involved.

For homeowners facing bankruptcy, a major concern is “Can I keep my house if I file for bankruptcy?”

There is both an easy answer to that, and a more complex answer.

If you file for bankruptcy using Chapter 13 – the so-called wage earner’s plan – you won’t have to surrender your home – that’s good news if keeping your home is a priority.

Of course, under Chapter 13 you’d be responsible for paying at least a portion of your obligations over time under the bankruptcy court’s orders. And if you want to continue to keep your home you’ll not only have to continue to make payments under the Chapter 13 plan, you’ll also have to keep your mortgage in good standing, which requires making regular mortgage payments, and paying property taxes and property insurance.

While Chapter 13 is a good way to go if in terms of protecting your home, it has its consequences as you will need to pay off portions of your other obligations as well.

If you want to have a complete discharge of all your debts, you may be able to do so under Chapter 7, if you qualify. However, whether or not you will be able to keep your home under a Chapter 7 bankruptcy is more complicated. It all depends on whether you have equity in the home – as calculated under special bankruptcy court rules – after anticipated selling costs and whatever exemption amount you may be entitled to.

Every situation is different, and there are many factors that will impact whether you should file for bankruptcy at all, and if so, which type to file and whether you can keep your home. That’s why it’s wise to consult a bankruptcy lawyer who can review your individual circumstances, help you choose the best option for your situation, and guide you through the process.

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