Can I Keep My House if I File for Bankruptcy?

One of the biggest things that holds people back from filing bankruptcy and getting the debt relief they need is the fear that they will lose their house. They want to get rid of their debt, but they don’t want to lose the things they have built so far. Plus, no one wants to lose their family home, whether they’ve only been in it a few years or they’ve lived there for decades.

Fortunately, filing for bankruptcy in Mesa doesn’t have to mean losing your house and ending up on the streets. However, there are more things to consider, so the answer to whether you will be able to keep your house or not if you file for bankruptcy is not a simple “yes” or “no.” You’ll need to talk to an experienced bankruptcy lawyer to review your finances and to know exactly how bankruptcy will impact you. But here are some general guidelines to give you a basic understanding of how bankruptcy works:

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is known as a “liquidation.” It is designed to discharge your unsecured debts, such as credit cards, personal loans, and medical bills. It offers maximum debt relief.

However, in order to qualify to file for Chapter 7 bankruptcy in Mesa, you have to meet the “means test,” which looks at your income compared to the average in your area, as well as your other sources of financial support and your assets. Your home is a huge asset, and as such, it can be subject to liquidation (or sale) to pay off your creditors.

That might make you think that you would definitely lose your home under Chapter 7 bankruptcy. However, you are allowed to exempt your home from such liquidation if the equity does not surpass a certain threshold. The amount varies depending on your marital status and other factors, but it is a generous limit. Most people will not exceed the limit unless they have been paying on their house for a very long time. Therefore, you will likely be able to keep your home if you file for Chapter 7 bankruptcy.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy around Mesa is what is known as a debt repayment plan, which is similar to a debt consolidation. The bankruptcy trustee looks at your finances and your debts and determines what you can pay over a three- to five-year repayment period. At the end of that time, you may be able to discharge some debt.

If your house is in foreclosure, or if you have become very late on your payments, filing for Chapter 7 bankruptcy won’t help you, but filing for Chapter 13 might. Those late payments and fees can be included in your repayment plan, helping you to get current on your home. You may be able to put a stop to current foreclosure proceedings, or you may be able to avoid the risk of foreclosure. The solution will depend on what you owe, your income, and other circumstances.

It’s important that you go through your finances with an experienced bankruptcy attorney to fully understand the impact that bankruptcy can have. Your bankruptcy lawyer will explain not only how each chapter of bankruptcy can give you debt relief, but also how it would impact each of your asses, including your home. Your bankruptcy attorney can work with you to devise the best plan to get maximum debt relief while also saving your home and other important assets.

If you are thinking of filing Chapter 7 bankruptcy or Chapter 13 bankruptcy, My AZ Lawyers can help. We’ll start by helping you understand the ins and outs of bankruptcy and how it can help your situation. Then we’ll analyze your financial circumstances to help you understand what you qualify for and how bankruptcy might impact your assets or other things. We’ll make recommendations that will maximize the debt relief you can receive with the least negative impact. Our attorneys are committed to helping you get your finances back under control. Call us today to schedule a consultation with an experienced bankruptcy attorney. We represent clients in the Mesa, Glendale, Tucson, and Phoenix areas, and we have a bankruptcy law office near you.

My AZ Lawyers
Mesa Location:
1731 West Baseline Rd., Suite #100
Mesa, AZ 85202
Office: (480) 448-9800

Glendale Location:
20325 N 51st Avenue Suite #134, Building 5
Glendale, AZ 85308
Office: (602) 509-0955

Tucson Location:
2 East Congress St., Suite #900-6A
Tucson, AZ 85701
Office: (520) 441-1450

Avondale Location:
12725 W. Indian School Rd., Ste E, #101
Avondale, AZ 8539