There are many homeowners who are worried that if they file for bankruptcy, they may lose their primary residence. This is especially true for individuals who are behind in the mortgage payments or who no longer have access to their property’s equity to help pay off other debts.
Mortgage delinquency or the inability to rely on home equity to shield homeowners from other forms of debt are the focus here. To get the answer to this fundamental question, Press The Restart Button and keep in mind that the response may not be as straightforward as one might assume since it depends on a substantial amount of information.
The Sort Of Bankruptcies That You Declare
The homestead exemption amount is available to you in the jurisdiction in which you will be filing your taxes.
- The worth of the equity in your home in comparison to its current market value
- The expenses associated with selling the house
- The sum that is owed to various financial institutions by you.
If you are considering filing for bankruptcy under Chapter 13, you will most likely be allowed to maintain your home even if you do so. If you file under Chapter 7, the circumstances will be less transparent.
How About The Exemption For A Primary Residence?
Homeowners who file for bankruptcy under Chapter 7 may be eligible for several exemptions. If a debtor files for bankruptcy in the jurisdiction of a particular state, the debtor is only allowed to retain up to a specified amount of equity in their home.
Some countries do not place any restrictions or limits on their citizens.It is possible to exclude an unlimited quantity of land in Florida, for instance, so long as the total area does not exceed half an acre within a municipal area or 160 linked hectares outside of a city. On the other hand, the exemption has fewer protections in some other states.
If an individual has more equity in their home than is permitted by the state’s exemption, the bankruptcy trustee may decide to sell the individual’s home in order to pay off a credit card company that didn’t yet acquire an exemption. This occurs when the individual’s equity is greater than what is allowed by the exemption. If a person has more equity in their property than the amount that the state allows them to keep as an exemption, then the person runs the risk of losing their home.
Even if the equity in a house is more than the exemptions, the costs associated with selling it can be too high for it to be profitable. Every one of these scenarios presents its own unique set of conditions.
Your Home If You File For Bankruptcy Under Chapter 13
If you are still behind on your mortgage interest and are concerned about the possibility of your home being taken away through foreclosure, declaring bankruptcy under Chapter seven may be an option for you. This type of bankruptcy allows homeowners to keep their homes even after they have defaulted on their mortgage payments.
To be eligible to file for bankruptcy under Chapter 13, you will need to devise a strategy to repay your obligations that your creditors can approve. The repayment plan may last anywhere from three to five years, providing you the time you need to get your financial situation under control so that you can start making payments.
Suppose you are interested in learning more about how you can maintain your house even after filing for Chapter 13 bankruptcy in Florida. In that case, you should seriously consider getting in contact with an experienced Sanford bankruptcy attorney.