What happens to your primary residence in bankruptcy?

One of the basic rules of bankruptcy is that you generally cannot discharge the debt on secured property and keep the property. If you have a mortgage or land contract on your principal residence, it will be considered secured debt.

How can I protect my home from bankruptcy?

In both bankruptcy chapters, you protect an asset with a bankruptcy exemption. Each state has a list of exemptions, so the property type and amount of equity you can protect using state exemptions varies widely. Only a few states let you keep all of your home equity when you file bankruptcy.

What property do you lose in Chapter 7?

After filing for Chapter 7, your property will go into a bankruptcy estate held by the Chapter 7 bankruptcy trustee appointed to your case. However, you don’t lose everything because you can remove (exempt) property reasonably necessary to maintain a home and employment.

What is exempt property in a bankruptcy filing?

Exempt property is property that the debtor can protect from liquidation. The Bankruptcy Code allows each state to adopt its own exemption laws, which the debtor can select instead of the federal exemptions. Exempt property typically includes: Motor vehicles, up to a certain value. Reasonably necessary clothing.

Can you own property after bankruptcies?

The truth is, filing bankruptcy doesn’t prevent you from buying a house. Written by Attorney John Coble. Many people are concerned that filing bankruptcy will prevent them from buying a house in the future. The truth is, filing bankruptcy doesn’t prevent you from buying a house.

Is your home exempt from bankruptcy?

The federal bankruptcy exemptions, and most state exemptions, provide debtors with a homestead exemption, which protects at least some of the equity in your primary residence. Unless you can work something out with the lender, you will eventually lose your home, despite your bankruptcy filing.

Is your home protected from creditors?

Homestead exemption laws prevent the sale of a borrower’s home by their creditors in satisfaction of a debt. In many states, whether your home may be subject to forced sale is a function of how much home equity you have.

What assets are protected in Chapter 7?

Exempt property (items that a debtor may usually keep) can include:

• Motor vehicles, up to a certain value.
• Reasonably necessary clothing.
• Reasonably necessary household goods and furnishings.
• Household appliances.
• Jewelry, up to a certain value.
• Pensions.
• A portion of equity in the debtor’s home.

Will I lose my home if I declare bankruptcy?

If you kept your house throughout the bankruptcy process, you are free to keep your home after the bankruptcy – as long as you continue to pay the mortgage. It may be that after you are free of all the rest of your debt you will be able to afford the mortgage payments easily. If so, you’ll be able to keep your house.

Is your house protected in bankruptcy?

The good news is that bankruptcy can protect your home, holding off a foreclosure. Chapter 13 bankruptcy is designed to allow you to keep your home, even if you are behind on payments. If you keep your house after filing for Chapter 7, the fact other debts are discharged should make it easier to pay your mortgage.

How long can I buy a house after Chapter 7?

If you’ve gone through a Chapter 7 bankruptcy, you need to wait at least 4 years after a court discharges or dismisses your bankruptcy to qualify for a conventional loan. Government-backed mortgage loans are a bit more lenient.

Can you buy a house after Chapter 7 with a co signer?

Can you buy a house after Chapter 7 with a co-signer? Yes, having a co-signer can improve your chances of getting a mortgage after a bankruptcy.