Will I Lose My House If I File Bankruptcy?
One of the most stressful questions when considering bankruptcy is whether or not you will lose your home in a bankruptcy case. In order to answer this question properly, it is important to distinguish between the main two types of bankruptcy cases for consumer debtors.
Chapter 13 Bankruptcy – Reorganization
Chapter 13 bankruptcy is a reorganization. There is no danger of losing your home in a chapter 13 bankruptcy case. Your home and it’s value may play a role in determining your chapter 13 bankruptcy payment plan but there will be no danger of losing your home.
Chapter 7 Bankruptcy – Liquidation
Chapter 7 bankruptcy is a liquidation. It is possible to lose your home if you file chapter 7 bankruptcy. If you own a home and are planning to file Chapter 7 bankruptcy, it is imperative that you consult with and retain a bankruptcy attorney. There are many cases where a client qualifies for chapter 7 bankruptcy, yet filing a chapter 7 case would result in the loss of their home.
California recently increased its homestead exemption for bankruptcy cases. After the update, the cases where a person could lose their home has decreased dramatically but it is still possible to lose a home in certain cases. The county where the individual debtor lives as well as when they acquired the property are important factors to consider when a person files for bankruptcy.
It is highly unlikely that you will lose your home in a Chapter 7 bankruptcy case, but it is critical to have a knowledgeable and experienced bankruptcy attorney assess your particular situation.
If you are looking to file bankruptcy contact us for a free initial consultation. Our bankruptcy lawyer can assess your case and give you an analysis on the impact bankruptcy would have on your home.