CAN I KEEP MY HOME IF I DECLARE BANKRUPTCY?
Whether you will be able to keep your home after filing for bankruptcy depends on several factors:
How Much Equity You Have in Your Home
Whether You File Under Chapter 7 or Chapter 13
Whether You Can Afford Future Mortgage Payments
CALIFORNIA HOMESTEAD EXEMPTION – If you have equity in your home, California law protects a portion of that equity from most creditors. This is known as the homestead exemption and allows you to keep between $75,000 and $150,000 of home equity depending on your age, income, and marital status. For more information about the California Homestead Exemption, click here.
CHAPTER 7: If you qualify for filing bankruptcy under Chapter 7, and you don’t have too much equity in your home, then there is a good chance you can keep your home – as long as you continue to make your monthly payments.
If the your equity in your home is equal-to or less than your exempt amount (discussed above), then you may be able to keep your home and still get relief from your other debts.
For many, the relief provided by Chapter 7 bankruptcy – getting rid of all the other debt -allows them to make their mortgage payments and save their homes.
The determination as to whether you can keep your home after filing a Chapter 7 case will require a detailed analysis of the circumstances surrounding your specific situation.
If your home is in foreclosure, see our Bankruptcy & Foreclosure page for more information.
CHAPTER 13: If you file and create a Repayment Plan under Chapter 13, then you can keep your home as long as you continue to make payments and are able, over the course of your plan, to repay any delinquencies.
Chapter 13 presents an excellent opportunity to keep your home if your payments on other unsecured debts is overwhelming and, were it not for those debts, you earn enough to make your house payments.
Chapter 13 also might present you the opportunity to save your home from foreclosure. For more information, visit our Bankruptcy & Foreclosure page.