If you have hesitated to file bankruptcy because you’re worried about your home, don’t worry. There are many ways to protect your property during your bankruptcy.
The key is choosing the right strategy, which is something our offices can help with. And that starts with evaluating some important aspects of your current situation.
The State of Your Mortgage
Are you current on your mortgage, or are you already behind?
Being current on your mortgage is helpful. It means you’re not in dire straits while you attempt to prevent foreclosure.
Being current also means you may be able to keep your home after filing a Chapter 7 bankruptcy. If you are behind, Chapter 13 is usually the only viable option for saving your home.
Federal bankruptcy exemptions protect a portion of the equity in your home.
In the state of New York, the exemption for real property, including co-ops, condos, and mobile homes, is $10,000. If you and your spouse are filing bankruptcy together you may double up for a total of $20,000 in equity.
If you have more equity, you may need to file Chapter 13 to protect your home. But if your equity is exempt, then you can file a Chapter 7 and keep your home, though you will have to reaffirm the debt and keep your mortgage.
You can use federal exemptions, too. Federal exemptions give you up to $25,150 for your homestead. And you can double this amount with your spouse as well.
If you choose not to reaffirm your mortgage debt in a Chapter 7 you don’t have to. The trustee will sell your home, and you’ll receive a check for your equity. This may be a good move if you need or want to obtain a rental home elsewhere that will be a bit more within your means.
Your Broader Financial Picture
Keeping the house may not be the best choice for you and your family.
You need to seriously evaluate whether you can keep up with the payments on a Chapter 13 plan, or even after you no longer have most payments due to a Chapter 7.
Or you need to evaluate whether you can sell the house while you’re on Chapter 13 to avoid foreclosure, and/or use the time to achieve a permanent loan modification which could make keeping the home feasible.
Don’t make the decision alone.
Working with an experienced bankruptcy attorney in Goshen, NY is the best way to make sure you protect your financial interests. You need someone who can look over the long-term financial picture and your current scenario and who can give you good advice based on your unique situation.
If you’re trying to save your home or know you need to file bankruptcy to protect your finances, call now to schedule a free consultation.
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