Jacksonville Bankruptcy Lawyer Blog
As a Jacksonville Bankruptcy Attorney I get calls all the time regarding the ability to keep their homes during and after a Bankruptcy. As such, I will try to briefly explain the process of a Chapter 7 and the ability to keep your home after you have filed.
When a client files for Chapter 7 Bankruptcy they are looking to liquidate all their debt and have a fresh start. With the downed economy this avenue for financial recover is becoming more and more prevalent. As I consult my clients as to their options in Bankruptcy, the number one question I receive is “Will I lose my house in Bankruptcy?” Unfortunately, the answer to that question is not always cut and dry. Meaning just because you file for Bankruptcy does not mean you will automatically keep your home. The main determining factor is EQUITY.
The question of Equity is key to keeping your home. Meaning, if your home has equity and it cannot be covered by exemption, the Trustee may want to sell your home to pay your creditors. However, if the equity amount will be covered by exempt status or the amount will not pay the costs of selling your home the Trustee may decide you can keep it. With that being said, I do not mean you get a free home. I mean you are able to stay in the home as long as you are current and making your mortgage payments.
By now, my clients ask then why file for Bankruptcy if I can still lose my house. The answer is, “it depends.” If after filing bankruptcy you continue to make payments, then you will keep your home. However, if you fall behind again on payments the Bank has all the rights to foreclose on your home. But, unlike before bankruptcy, you will not be liable for any deficiency for the loss between the selling and the amount owned. Just as a point of reference, when you file Bankruptcy you separate your personal liability for the Mortgage. Meaning you are only responsible for the house as long as you pay for it. When you stop the Bank can take it away, but nothing else. Additionally, these payments after the Bankruptcy will probably not be reported to the credit bureau, so it will not benefit or harm your credit in moving forward.
I know this is a lot to take in and the nuisances can be cumbersome to manage. That is why I would suggest scheduling a FREE consultation with a Jacksonville Bankruptcy Lawyer to talk specifically about your needs and the best plan in getting you out of this financial crisis.
If you would like more information regarding Bankruptcy, check out our websites. If you would like to schedule a FREE consultation with a Jacksonville Bankruptcy Attorney call my office directly at 904-685-1200.