Keep your HomeWhen foreclosure help is needed, time is usually of the essence. Homeowners in this situation do not have the luxury of trying different options to see which one works. They may know that Chapter 7 bankruptcy will help them discharge unsecured debts. However, they may also be aware that to repay these debts, they may have to give up property. Does this include their homes or can they keep them these properties? Find out by speaking with an expert bankruptcy attorney for free and save your home!

File Bankruptcy – Keep Your Home!

Most homeowners who file for Chapter 7 bankruptcy can keep their homes, provided that their mortgage payments are current. However, some who have significant equity may lose their properties if this equity is needed to repay unsecured creditors. For individuals who plan to walk away from their homes, Chapter 7 can temporarily stop foreclosure, allowing them to remain in the properties longer.

Individuals who have no equity in their homes can keep these properties during Chapter 7 bankruptcy. Chapter 7 filers who have some home equity may be able to exempt all of it through a homestead exemption. Most debtors using Chapter 7 bankruptcy do not have enough nonexempt equity to trigger property sale, allowing them to keep their homes during bankruptcy.

Through a two-step process, homeowners can determine the likelihood of property sale by a Chapter 7 bankruptcy trustee. Determining the amount of the homestead exemption is the first step. Residents of some states may use the federal homestead exemption and most states offer their own homestead exemptions based on dollar value. A bankruptcy lawyer can help a homeowner determine which exemptions apply and the relevant exemption amount.

The next step involves determining whether there is enough nonexempt equity in the home to trigger property sale during Chapter 7. Nonexempt equity is equity that is not protected by any applicable homestead exemption. Begin with the market value of the home and deduct the homestead exemption amount, trustee commission on the difference between the two figures, cost of sale, mortgage balance, and balances of property-secured nonmortgage liens. If the result is a negative number, there is not sufficient equity to trigger sale of the home.

If a positive number results, the Chapter 7 bankruptcy trustee could use this amount of equity to repay unsecured creditors. The trustee may sell the house, provide the homestead exemption amount to the debtor, repay lien and mortgage holders, and repay unsecured creditors with the balance. A bankruptcy lawyer will discuss alternative ways to get rid of debt and save your home and will give you the details with a 100% free consultation! Get started saving your home today!