Commonly used as a fear mongering tactic against people considering bankruptcy, we constantly hear of people mistakenly believing that they will lose their home if they file a Chapter 7 bankruptcy. The truth is losing your home, if the bankruptcy is prepared and filed correctly, typically never happens so long as you can afford to continue to make your mortgage payments and you qualify for Chapter 7 protection. If you can do this, you can still keep your home or residence even in a chapter 7 bankruptcy and in fact discharge or eliminate the mortgage or home loan securing your house!
Back during the turn of the millennium, when California real estate was really booming and it seemed everyone was an inspiring “real estate investor” and real estate investments were doubling, tripling and even quadrupling in equity. Well… at that time, there was plenty of equity to exceed the bankruptcy exemption protections thus subjecting some homes into forced sales by the trustee. However, in today’s economy, equity in most people’s real estate has painfully disappeared and leaving almost all homes completely negative in value. These same “investors”, and you, can keep your homes and still file a Chapter 7 Bankruptcy because of the diminished amount of equity which a qualified bankruptcy attorney can you protect. The caveat however is that you must to stay current on your mortgage or face foreclosure by the lender. Ultimately, don’t let the fact that you have a house stop you from filing Chapter 7 Bankruptcy.
Want to Know the Best Little Secret about Owning a Home & Filing Chapter 7? Our bankruptcy attorney can help you discharge, i.e. eliminate, your mortgage liability while you still keep in your home! Consequently, you will no longer be on the hook for the house financially to your lender AND you can keep living it provided you stay current with your payments. Best of all, you will eventually own it when you pay off the loan balance. Oppositely, you can walk away from the home long after your bankruptcy should you desire to move without worry about your financial liability to your lender. Why? Because current bankruptcy laws do not require that home owners to reaffirm their mortgage in order keep the home. So long as you are current, I haven’t dealt with one mortgage will foreclosure on your house. Simply put, mortgage companies would rather you pay your loan than have to foreclose on the property and lose all their money. Additionally, you do not have to file a Chapter 13 bankruptcy in order to keep your home. You can still retain your home in a Chapter 7 Bankruptcy as long qualify for a Chapter 7 Bankruptcy.
If you have any questions regarding your home loan and qualifying for a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, please don’t hesitate to contact us for a free consultation today or fill out our free online evaluation.
