Surviving Bankruptcy: Keeping Your Home
Bankruptcy can be a scary experience. Many people worry about losing their homes. However, it is possible to navigate bankruptcy and keep your house. Understanding your options is key.
Understanding Bankruptcy Options
There are different types of bankruptcy. Chapter 7 bankruptcy involves selling assets to pay off debts. However, many exemptions exist to protect certain assets. Chapter 13 bankruptcy involves creating a repayment plan over three to five years. This option allows you to keep your assets while paying down debt.
Chapter 7 and Your Home
In Chapter 7, the bankruptcy trustee may sell assets. The proceeds go to creditors. However, many states offer homestead exemptions. These exemptions protect a certain amount of equity in your home. If your equity is less than the exemption amount, you may be able to keep your home. If your equity exceeds the exemption, the trustee might sell your home. They will use the excess equity to pay your creditors.
Chapter 13: A Path to Keeping Your Home
Chapter 13 bankruptcy offers a different approach. It allows you to create a repayment plan. You will make monthly payments to creditors over a set period. As long as you stick to the plan, you can keep your assets, including your home. This option is useful if you’re behind on mortgage payments. You can include the past-due amount in your repayment plan.
Strategies for Staying in Your Home
First, understand your state’s homestead exemption laws. This will tell you how much equity you can protect. Second, explore options for catching up on mortgage payments. This might include a loan modification or a repayment plan with your lender. Third, consult with a bankruptcy attorney. They can help you understand your options and navigate the bankruptcy process. They can also help you determine the best course of action for your specific situation. Carefully consider all factors before making any decisions.
Protecting Your Assets During Bankruptcy
Bankruptcy can be a complex process. It is important to understand your rights and options. With careful planning, it is possible to protect your assets and emerge from bankruptcy in a stronger financial position. Don’t hesitate to seek professional advice.
Source: usatoday.com
