Filing for bankruptcy is a serious decision that can have far-reaching consequences, but for some Americans, it can be a great way to start putting the past behind them so they can begin to rebuild their financial futures. If you are among the many people across New York or Vermont considering filing for bankruptcy, you could feel concerned about the possibility of losing your home in doing so.
While there is no simple, one-size-fits-all answer to whether you will have to surrender your home during bankruptcy, determining whether you plan to file a Chapter 7 or Chapter 13 bankruptcy case may help you get closer to finding the answers you seek.
Your home and Chapter 7 bankruptcies
If you choose to move forward with a Chapter 7 bankruptcy, you do so with the understanding that you do not have enough assets on hand to cover your bills and debts. When it comes to whether you will ultimately lose your home when you file for a Chapter 7 bankruptcy, this depends on exactly how much your home is worth. Generally speaking, if the equity you have in your home is lower than the exemption amount in place in your state, your home should be exempt from seizure, meaning you should be able to hang on to it.
Your home and Chapter 13 bankruptcies
Should you file for a Chapter 13 bankruptcy as opposed to a Chapter 7, you are essentially agreeing to restructure your debts in an effort to make them more manageable for you. Typically, as long as you keep up with your restructured payment terms during a Chapter 13 bankruptcy, you should be able to hang on to your home despite filing.
Filing for bankruptcy is a serious step that takes time and involves careful consideration, but in some cases, you may be able to file for it without having to give up your home.