Saving Your Home During Personal Bankruptcy
If you own your home and you want to keep it after filing bankruptcy, you must take steps now to protect yourself. You must be up to date on your mortgage payments and property taxes and you must have enough monthly income to keep them current.
If you are filing Chapter 7 bankruptcy, you need to be current on you mortgage payments and have very little equity in your home. Since the mortgage company holds the title to your home and you have very little equity, the courts cannot make a sale to pay down your debts. The key in Chapter 7 bankruptcy is to be up to date on your mortgage and tax payments before all other debts. If you owe back payments on the mortgage, you may lose the home if you cannot work out an agreement with the mortgage company.
If you are filing Chapter 13 bankruptcy, the same rules apply - you must be up to date with your mortgage and taxes. You will also need enough monthly income to pay your monthly expenses and your debt payment to the trustee. Remember, with Chapter 13, you cannot be late on your agreed upon payments to the trustee or the agreement can be voided.
In either type of personal bankruptcy, saving your home is not difficult with a little preparation. Make sure all of your mortgage and tax payments are up to date and by all means, talk to a bankruptcy attorney.
