How Do I File Chapter 7 And Keep My House?

by | Last updated on January 24, 2024

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If you wish to file Chapter 7 bankruptcy and keep a property for which you have fallen behind on monthly payments, you may be able to negotiate with your mortgage company before filing. If your lender agrees to modify your loan or refinance to resolve arrears, you can bring the mortgage debt current.

What happens to my house if I file Chapter 7?

When you complete a Chapter 7 bankruptcy, your qualifying debts get discharged, including your mortgage debt. However, even though you are not liable for your mortgage, the lender will still have a lien against the property (Chapter 7 bankruptcy does not get rid of mortgage liens).

How much equity can you have in your house and file Chapter 7?

Single homeowners age 64 or younger can exempt up to $75,000 of their homes' equity, while married couples age 64 or younger can exempt up to $100,000 of their homes' equity.

How long can you stay in your house after filing Chapter 7?

Depending upon where you live, you may be able to remain in your home for six months or more after your Chapter 7 bankruptcy has been finalized. Once your bankruptcy is discharged, you will need to find another place to live. However, you may not need to leave your house immediately.

Can I keep my house in Chapter 7 if I have equity?

Most Chapter 7 bankruptcy filers can keep a home if they're current on their mortgage payments and they don't have much equity. However, it's likely that a debtor will lose the home in a Chapter 7 bankruptcy if there's significant equity that the trustee can use to pay .

How much equity can you have in your house and file Chapter 7 in California?

When Debtors Can Keep a House Under Chapter 7 Most debtors fall under the system of exemption that is available for those who are earning regular monthly income. If debtor earns monthly income, then, the house or real property must have an equity of no more than $20,725.

Can I keep my house and car in a Chapter 7?

Chapter 7 bankruptcy allows you to keep your home if 1) you are current with your mortgage payments when you file for bankruptcy, and 2) your state laws approve of the bankruptcy exemption. Regarding your automobile, most chapter 7 cases allow you to keep the vehicle if you are current with payments.

What assets are lost in Chapter 7?

Everything you own or have an interest in is considered an asset in your Chapter 7 bankruptcy. In other words, all your belongings are “assets” even if they're not really worth much. That doesn't mean that the bankruptcy trustee will sell everything you have, though.

Can Chapter 7 take your tax refund?

A tax refund is an asset in both Chapter 7 and Chapter 13 bankruptcy. It doesn't matter whether you've already received the return or expect to receive it later in the year. As with all assets, when you file for bankruptcy, you can keep your return if you can protect it with a bankruptcy exemption.

Will I lose my furniture in Chapter 7?

In most cases, you can use state or federal exemptions to keep most or all of your household goods and furniture when you file for Chapter 7 bankruptcy. Most Chapter 7 bankruptcy filers can keep all of their household goods and furniture in bankruptcy.

Can I file Chapter 7 if I am behind on my mortgage?

You Cannot Catch Up on Overdue Mortgage Payments Through the Bankruptcy. Chapter 7 bankruptcy does not have a mechanism for you to catch up overdue mortgage payments through your bankruptcy case. And the bankruptcy court cannot compel your mortgage company to work out any kind of repayment plan with you.

Can a bank foreclose after Chapter 7?

Chapter 7 bankruptcy will not, in the end, prevent a foreclosure on your home. Or, the lender may wait to foreclose until the bankruptcy case is over. If you want to keep your home, you need to keep making your payments before, during, and after bankruptcy.

Can I keep my house if I convert from Chapter 13 to Chapter 7?

Sometimes, conversion to Chapter 7 is necessary because you can't keep up with the payments required under your Chapter 13 plan, but conversion may be possible regardless of your reason. Depending on your situation, you may keep your house and car under Chapter 7, though generally the payment must be current.

Can I keep 2 cars in Chapter 7?

In some cases, you can keep two cars when you file for Chapter 7 bankruptcy. Also, if you're making car payments, must be current on the loan, and you might have to show that you can afford to continue making the payment without causing undue hardship on yourself and your family.

Can I keep my paid off car in Chapter 7?

The motor vehicle exemption helps you keep your car, truck, motorcycle, or van in Chapter 7 bankruptcy by protecting equity in a vehicle. If you're behind on your car loan, you can't keep your car unless you work out a plan to bring your payments current before you file for bankruptcy (more below).

Ahmed Ali
Ahmed Ali
Ahmed Ali is a financial analyst with over 15 years of experience in the finance industry. He has worked for major banks and investment firms, and has a wealth of knowledge on investing, real estate, and tax planning. Ahmed is also an advocate for financial literacy and education.