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Lawyers solicited for peer reviews include both those selected by the attorney being reviewed and lawyers independently selected by Martindale-Hubbell. All reviewers are verified as attorneys through Martindale-Hubbell’s extensive attorney database. Only attorneys practicing at least three years and receiving a sufficient number of reviews from non-affiliated attorneys are eligible to receive a Rating. The data referenced above is from Martindale-Nolo Research's 2016 bankruptcy study, which analyzed survey responses from readers who had filed bankruptcy and had researched hiring a lawyer. The names of any quoted readers have been changed to protect their privacy. Your home equity is determined by removing what you owe for the assetthe mortgage and property taxes.

Finally, both the trustee and your creditors can object to the plan you created. Chapter 13 also provides a way to get caught up if you are behind in mortgage payments. ’ If you are a homeowner struggling with debt, you can take comfort in knowing that keeping your house is very realistic and you have many debt relief options.
What Are Chapter 7 Bankruptcy Exemptions
Concerned about whether you can file for bankruptcy if you own property and if you can lose a house if you own it? Learn about bankruptcy and homeownership so you know whether you can protect your home in Chapters 7 and 13 before filing. The very goal of the Bankruptcy Code is to assist debtors in restructuring and managing excess debt in order to avoid financial catastrophe and help creditors get paid. Over the years, bankruptcy has made economic recovery possible for millions of Americans. Assume Sonny and Cher’s $100,000 condominium is now worth $80,000. If they pay $20,000 before the protected repayment period ends, they could own the property free and clear.

Learn which debt relief solution is best for you by booking a free consultation with Spergel today. The sooner you reach out, the sooner you can work on keeping your home and assets safe from creditors. If you have nonexempt equity, the bankruptcy trustee will sell the house and use the proceeds to pay other creditors. Suppose the exemption isn't enough to cover all of your home equity. In that case, the Chapter 7 court-appointed trustee will sell your house.
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If you have significant nonexempt home equity you cant protect, the trustee will sell your property, following the usual real estate selling process. The trustee doesnt need to rush the sale because a quick sale would usually result in lesser value for your home, which is not going to benefit you. The two major types of bankruptcy are chapter 7 and chapter 13. However, the most important difference to understand if you are looking to keep your home is what exemptions you are entitled to under each chapter.
The Homestead Exemption in Georgia allows you to keep your home when you file bankruptcy as long as you don’t have excessive equity. Using this exemption keeps the property safe from both the bankruptcy trustee and other creditors. This is only a valid exemption if you or your dependent uses the property as a primary residence. Because his house has $50,000 in nonexempt equity, he will lose his house in Chapter 7 bankruptcy.
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You pay the value of the non-exempt property in your repayment plan or out of disposable income. These approaches are designed to ensure that creditors receive the same amount of money no matter which form of bankruptcy you file. During Chapter 7 bankruptcy, the bankruptcy trustee sees nonexempt assets and distributes proceeds to creditors and your debt is wiped out.
When you find yourself facing the loss of your home to foreclosure, it can be a confusing time, and an attorney can help you navigate the complexities of avoiding foreclosure and filing bankruptcy. If you’re debating whether to declare bankruptcy or not, an attorney can help you choose the right option for you. Further assume the house needs a $50,000 foundation repair job.
This means the bank has a sort of ownership interest in the real estate. As long as you make your monthly payments, the home is yours to keep. If you don’t pay your mortgage, the bank can take the house back by way of a foreclosure. In a Chapter 13 bankruptcy, the equity in your home is also a factor, and figured into the amount you have available to pay your unsecured creditors.

While this is unfortunate, you have the ability to pay off your mortgage and this new loan if you want to keep your house. However, because bankruptcy can eliminate credit card and other unsecured debts, filing will often put you in a better financial position that allows you to keep your home. Abandonment happens when the money available to pay creditors doesn't justify the time and money involved in selling the home. The trustee will determine whether a sale will generate enough cash to make a meaningful payment on your unsecured debt, such as credit card balances, personal loans, and medical and utility bills. In Chapter 7 bankruptcy filings, the trustee will sell all non-exempt property, and the proceeds are distributed to your creditors.
In the example above, the trustee will likely abandon the car. Once the secured creditor is paid, there will be no additional funds with which the trustee can pay unsecured creditors. Therefore, it is not worth the trustee’s time or expense to liquidate that car. If you have a choice of exemption systems, you’ll select the one that best protects your property. Because Chapter 13 bankruptcy involves a repayment plan you can use it to catch up missed payments.
For example, if the IRS files a lien on Julie’s property before she files for bankruptcy, her lawyer must address that lien in a separate legal action. As a debtor, it is easy to feel lost and hopeless, especially when going through bankruptcy. Bankruptcy can help you get rid of debt or restructure your finances through a plan depending on the chapter you file under. If you want to protect your house, that might affect which chapter you choose. If the court agrees, it will grant your motion and order the car lender to accept a lump-sum payment.