If you own a house, you have probably put quite a bit of time and effort into keeping it fixed up. First, you looked for just the right house in just the right area for your family. You have decorated and worked to make it your own special home. However, you may have recently fallen into difficult financial circumstances. Whether you have lost your job or have had to deal with large medical bills or for some other reason, you may be in the position that you are contemplating filing bankruptcy. If this is the case, one of the biggest questions on your mind is probably whether or not you can keep your house if you do file for bankruptcy. If you will lose your home, where will you go and how will your family handle it?
Actually bankruptcy may be a way to help you keep your house if you are in a position of financial difficulty. The court cannot take your home away. The way to lose the home is if you cannot make the mortgage payments after the bankruptcy case has been completed. If you qualify for a Chapter 13 bankruptcy, then you will actually be given the opportunity to catch up on past mortgage payments and pay them back over a period of time, usually from 3 to 5 years.
If you are filing a Chapter 7 bankruptcy, all of your assets are gathered and most of them can be sold to help pay your creditors. However, if you are upside-down in your house, which means that you either owe what it is worth or more than it is worth and you have no equity whatsoever in the home, it is not treated as an asset and will not be sold to help cover you debts. If this is the case, your payments in a Chapter 13 bankruptcy won’t increase the payments you are required to make on the payment plan that is decided upon.
If you own a home with a lot of equity and it is your primary residence, and you qualify to use the Texas exemptions, you can exempt all of your equity in this home under the Texas Homestead exemption. You can consult with an El Paso bankruptcy attorney about this exemption.
If you took out a second mortgage on the home before the market went south, a Chapter 13 bankruptcy may force the second lender to modify the loan amount to be more in line with the current value of the home, which could lower your payments enough that you could make them. Speaking with a bankruptcy attorney is an excellent way to find out your options and determine whether it is best for you to declare bankruptcy or not. In most cases it can actually be a very beneficial step on the road to becoming self-sufficient again and will also allow you to keep your home in the process.
About the Author: Jeff Davis is the Owner of the Davis law firm, and a highly experienced El Paso bankruptcy attorney. To find out more information about a El Paso bankruptcy lawyer, please visit www.jeffdavislawfirm.com.