A common question in bankruptcy is can I keep my home if I file for bankruptcy

The short answer to that question is maybe. It depends on it you have equity in your and if you’re behind in your mortgage. If there is no equity in your home, which means that the amount that you owe on the mortgage is more than the house is worth and you are current on that mortgage, you’re gonna be able to keep your house in bankruptcy as long as you can keep current on the payments. Now, if there is equity on the home, you may have more of a problem trying to keep it in bankruptcy because the trustee is going to think about selling the home so that he can take the proceeds and use them to pay creditors, so the trustee is going to decide if the amount that you owe on the house plus the exemptions you’re allowed to keep are less than the value of the house. If they are less, then the trustee is really going to think about selling your house and you may lose your home. In which case, you don’t want to go into a Chapter 7 bankruptcy, you want to consider a different approach to your financial problems. Maybe you don’t have a lot of equity in the house but you’re behind on your mortgage. Then, you can use a Chapter 13 case to catch up on the arrears on the amount of money that you owe the lender. You can typically do that over a 60‑month period. That’s one of the big advantages in a Chapter 13 case and sometimes why it’s better than a loan modification where you are uncertain about what the lender is going to do for a year or more.


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