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Will I Be Able to Keep My Home in a Bankruptcy?

If you are considering filing for bankruptcy, it is likely you realize that you’re going to have to make some difficult decisions and sacrifices as a part of that process. If you’re a homeowner, you may be concerned about the prospect of losing your home in bankruptcy, and wondering if there’s some way to file while remaining in your home. While the answer can vary depending on your individual circumstances, there are ways that you can file for bankruptcy while keeping the house.

Keeping your home with a Chapter 13 filing

Chapter 13, also known as personal reorganization bankruptcy, requires petitioners to comply with a payment plan for their debts, as created by the bankruptcy court. If you are behind on your mortgage payments, Chapter 13 bankruptcy is likely the best way to stave off foreclosure, and to catch up on any past-due mortgage balance. If you’re concerned about whether or not you’ll be able to make your payments each month, speak with your bankruptcy attorney about requesting a plan that allows for lower monthly payments over a longer span. This can increase your chances of successfully making payments each month, thus increasing your chances of consistently complying with your bankruptcy plan.

Keeping your home with a Chapter 7 filing

Chapter 7 bankruptcy is also known as liquidation bankruptcy, as it wipes out your debt and uses the proceeds from the sale of your non-exempt personal property to pay creditors. Whether or not you will be able to keep your home if you file under Chapter 7 depends on several factors. First of all, it is important that you be current on your mortgage payments if you wish to keep your home in a Chapter 7 bankruptcy, and that you be able to continue to make those payments. Secondly, whether you can keep your home will depend on how much non-exempt equity you’ve built in your home. When filing for Chapter 7, every petitioner is granted exemptions in set amounts for categories of personal property, including a homestead exemption that can be applied toward the equity you’ve built up in your home. In Mississippi, the homestead exemption for Chapter 7 bankruptcy filers is $75,000 for property where you live.

If you’ve built up less than $75,000 in equity in your home, you should be able to avoid sale of your home. If you have somewhat more than $75,000 in equity, you may still be able to keep your home, depending on such factors as the applicable costs of a sale, the amount you owe on your mortgage or other liens on your home, and the amount of the trustee’s commission. A bankruptcy attorney can help you calculate whether or not the homestead exemption would apply in your case. Most people are able to keep their home and other property and still obtain a Chapter 7 bankruptcy.

For seasoned, knowledgeable legal help with a Mississippi Chapter 7 or Chapter 13 bankruptcy filing, contact the Gardner Law Firm for assistance with your case, with offices conveniently located in Biloxi (228-436-6555), Pascagoula (228-762-6555), and Hattiesburg (601-582-4300).

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