The short answer is it depends. In a Chapter 7 filing, while you will forfeit property but be forgiven of some debts, you can either formally reaffirm the home loan or, in some court districts, just keep making payments. If you fall behind payments, and have some equity in your home, Chapter 13 bankruptcy may be a safer choice for you because it allows you to pay off the past debt arrearages (loan) over time and thus face less risk of losing your house to the trustee. A key item in a Chapter 13 case is if a debtor whose property loan is in default can make the larger loan payments (the past due payments plus resuming the original payments) over the repayment time. Finally, if your home value is larger than your states homestead exemption, Chapter 7 would not the right thing to do since you would most likely lose your house.
Can I keep my home if I end up filing a bankruptcy?
June 6th, 2010
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