Denise Brown Bankruptcy Law Blog on Lawyers.com

Will I Lose My House If I File For Bankruptcy?

Tuesday, September 29, 2009 by Denise Brown

Most homeowners think that if they file for bankruptcy, then they will lose their house. This is not always the case, but you should speak with a bankruptcy attorney in Louisville about the specifics of your case.

If you do file for bankruptcy and you own a house, the trustee assigned to your case will first determine if there is any equity in your house. This is calculated by taking the current value of the house minus the costs of the sale of the property minus the payoff amounts on all liens on the property. If there is no equity in the house, then the trustee will let you keep the house. You will be able to keep the house as long as you pay any mortgages on the house.

Bankruptcy does not remove the liability for voluntary liens such as mortgages. It also does not relieve tax liens. Therefore, your lender retains the right to foreclose on your property if you do not pay your duties.

As long as you continue to pay your mortgage, you will not lose your home. You need to remember that banks are not in the business of owning properties and selling them and do not want to own your property. They will only resort to foreclosure if that is the only way for them to collect what is owed to them.

If your home does have equity, the trustee and courts will determine if the equity is exempt. Any assets that are exempt are yours to keep and cannot be included in the bankruptcy proceedings. If the entire amount of the equity is exempt, then you will be able to keep your house as long as you continue to pay your mortgage. If the exemptions are not enough to protect your equity, then you may want to consider filing for Chapter 13 bankruptcy.

It is advisable to speak with an experienced bankruptcy attorney about your case. He/she will be able to help you determine the amount of equity you have in your house, if any, and if the equity is exempt. Your attorney should be able to help you determine if filing bankruptcy in louisville is the best option for you as well as the type of bankruptcy best suits your needs.

This article has been provided by:

Denise Brown’s Legal Direction
327 Guthrie St.
Louisville, KY 40202

Posted at 13:45 PM

Topic: Bankruptcy