Can a person file for bankruptcy and keep my home? is the initial query made by homeowners thinking about declaring bankruptcy. Do “they” intend to steal my home? They carry on.
In Chapter 7, a house has a number of related problems. Generally speaking, you may keep your home as long as the equity is exempt and you can afford the needed payments.
Equity is excluded
The trustee won’t try to sell your house to pay your creditors if there is no equity in it above the exemption you claim for it. Finding assets having a net worth from which creditors can be paid is the responsibility of bankruptcy trustees. The trustee has no stake in the house if there is no net equity. To determine the non-exempt equity, subtract the home’s worth from any secured obligations owed against it, any legal exemptions, and any closing fees.
The house is shielded from the bankruptcy trustee if the result is zero or negative. People can consider Chapter 13 if there is a significant amount of non-exempt equity.
You can pay the debt.
The mortgage is no longer personally liable for you thanks to the bankruptcy discharge, but the mortgage’s security lien remains intact.
As a result, even after filing for bankruptcy, the mortgage lender retains ownership of the property, including the ability to foreclose if you default on your payments or otherwise violate the terms of the loan. The secured creditor almost always wants you to maintain the house and continue making loan payments. No justification is needed for the lender to foreclose. Even lenders with the legal right to foreclose appear to be taking their time these days. People must make sure to consider Chapter 13 if it makes sense to keep the house but you are behind on your payments.
Do you want to keep the house?
A different query is whether it makes sense to keep the home if it is entirely mortgaged (that is, the debt on the house is equal to or greater than the value of the house).
In certain cases, borrowers have taken out home equity loans pledging the whole value of the collateral to the lenders. Or the local economy has caused a sharp decline in the value of the residence. Alternatively, the mortgage payments are more expensive than renting a similar home.
Giving up real estate that is more of a burden than an asset might be a part of starting again.
If you live in Dallas or Los Angeles and require the services of an experienced bankruptcy attorney, contact Recovery Law Group at (888-297-6203). To arrange an online appointment or learn more, go to the following link:https://recoverylawgroup.com/bankruptcy/