Can I declare bankruptcy and still keep my house?

Asked on August 16, 2012 under Bankruptcy Law, New Hampshire


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Whether or not you can save your home depends on the type of bankruptcy that you file, the amount of equity in your home and if you own the house solely in your name or jointly with someone else.

In a Chapter 7, you will lose some assets but get rid of most of your debt. Specifically, as to your home, you might be able to either reaffirm your mortgage or, depending on your judicial district, just keep making payments. Another factor is if you have fallen behind on your mortgage payments and also how much equity, if any, there is your the home (if your equity is larger than your state's homestead exemption, Chapter 7 is not the best option since it would probably lead to the loss of your home).

A Chapter 13 may be a better choice because if you are in default of your mortgage (you did not indicate), it would allow you to pay off any past due payments over time and therefore face less of a risk of losing your home to the bankruptcy trustee. In a Chapter 13 case, a major consideration would be if your home loan is in default and whether or not you could make larger mortgage payments thn before (i.e. the missed payments plus the original payments) over the repayment period of the plan.

Finally, if you own your home jointly with another person this can affect how the home is treated during the bankruptcy. If ownership is shared with a spouse, community property laws (if applicable) can limit or expand available exemptions and filing jointly on a joint property may allow you to protect a greater interest in the home.

Bottom line, since each case depends on a debtor's specific circumstances and the laws of each state, you really at this point should consier consulting with a bankrupty attorney in your area.

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