When you file Chapter 7, do you lose your house?

What about your car?

Asked on July 15, 2014 under Bankruptcy Law, Louisiana

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Your house and your car are assets that are potentially subject to liquidation (to being sold for the benefit of creditors) in a chapter 7 bankruptcy. Whether they will be or not depends in large part on their value and on the state of any financing you owe on them: for example, a house which is underwater on its mortgage would not be liquidated assuming you can keep paying the mortgage (if you can't the lender holding the mortgage will be able to foreclose) since there won't be any equity or value for the other creditors.


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