Our homes are deeply important to us. Not only can homes be huge financial assets, we also place a lot of emotional capital into the place we lay our head at night. Some people are so scared about losing their home in bankruptcy that they don’t even look into filing. While it’s possible to lose your home in a bankruptcy, it can be easily avoided with proper planning.
California is very generous in terms of exemptions. A home owner can protect anywhere between $75k to $175k in equity depending on his or her circumstances. So, there is a lot of room to protect your home using exemptions. Filing a Chapter 13 bankruptcy is a great way to keep your home if you can’t protect all your equity under statutory exemptions. A Chapter 13 consists of a payment plan to pay back some of your debt. Creditors cannot go after your home so long as you stay current on your Chapter 13 plan. Filing a Chapter 7 is a little different because your debt is discharged, not paid back. Regardless of the chapter bankruptcy you file you’ll have to keep paying your mortgage if you want to keep your home
I’d recommend talking to an attorney about your situation to see how you should protect your home from liquidation. Feel free to give my Fairfield bankruptcy office a call if you’re looking into bankruptcy.
Categorized in: Loans