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The California Homestead Exemption protects your home’s equity up to a certain point. In some cases, however, your home’s equity is more than the exemption and can trigger a sale. In this case, you can file for a Chapter 13 bankruptcy that allows you to work out a court-ordered repayment plan with your creditors and still keep your home. If you are not behind on your mortgage payments when you file chapter 7 bankruptcy, it is likely that you will not lose your home during the process.
Attorney Thomas M. Fesenmyer is dedicated to helping his clients solve their financial issues in a timely and cost-effective manner. Tom’s goal for all of his clients is asset protection and debt elimination. According to the CNBC, 43 percent of card holders carry a balance each month, and the Federal Reserve reports that outstanding card debt hit a record $1.023 trillion in November 2017. Rising credit card debt is a leading reason why Americans get into a financial hole and wind up being threatened with foreclosure on their homes. Bankruptcy, obviously, is complicated, and if you’re worried about keeping your house, it’s even more so.
In Indiana What Property Can I Keep
Equity is the difference between what you owe and what your home is worth. To calculate the equity in your home, subtract the outstanding mortgage from the home’s fair market value. For example, if your home has a fair market value of $500,000 and you owe $425,000, the equity in your home is $75,000.
If you’ve already fallen behind on your mortgage payments when you file for Chapter 7 bankruptcy, you’re likely to lose your house. Filing for bankruptcy lets you stay in your home another month or two, but ultimately, the bank will foreclose on the property unless you can catch up on your payments quickly. But if the foreclosure sale price is less than what you owe on the mortgage, your remaining mortgage debt can be discharged in bankruptcy.
Consider the Equity You Have in Your House
If the homestead exemption doesn't fully cover your home equity, check for a "wildcard" exemption that you can use on any property of your choice. Not all states have a wildcard exemption, and some don't let filers use the wildcard on homes and other real property. When you file either a Chapter 7 straight bankruptcy or aChapter 13payment plan case, you'll be able to structure it so that you can keep your vehicle. The Automatic Stay instantly stops foreclosure proceedings, acceleration notices, and collection efforts.
If you are thinking about declaring bankruptcy, then you may also be worried about how you are going to manage all your finances in the future. If you can't afford the payment—and many people can't because nonexempt equity can drive up a monthly payment fast—you won't qualify for Chapter 13 bankruptcy. Keep good records if you try to get around this problem by selling assets before filing for bankruptcy. You can always sell property and use the funds for your expenses, but you should plan to turn over any remaining amount to the trustee. Many people assume that income tax debt is not dischargeable in bankruptcy.
Common Reasons People File Chapter 7 Bankruptcy
An attorney does more than fill out paperwork, which is the only thing a cut-rate bankruptcy petition preparer can do. Furthermore, only a lawyer unlocks some advanced bankruptcy options, which, in many cases, save your family thousands of dollars a year. Foreclosure is a legal process by which your creditor can take title to your house, sell it, and satisfy your debt with the proceeds. If your house is foreclosed and sold, you may be forced to move, which can add additional stress to an already difficult situation. You may be able to protect assets such as your home and your car through bankruptcy.
That means you will only be allowed to use Georgia exemptions when filing. An exception to the exemption rule in Georgia is the ability to use federal nonbankruptcy exemptions to protect disability benefits and certain retirement accounts. Nothing would remain for creditors after paying storage fees, sales costs, and the amount owed to the lender because trustees must pay off car loan liens in Chapter 7 when selling property. The trustee would likely abandon the car, and you'd get to keep it. If you kept your house throughout the bankruptcy process, you are free to keep your home after the bankruptcy as long as you continue to pay the mortgage.
Protecting Your Home In Chapter 13 Bankruptcy
The investigation also found that both spouses accumulated most of their debt in the seven months before they filed for bankruptcy. Each had obtained more than $130,000 in cash advances, as well as bought goods on credit. Exemption planning is the practice of organizing your financial affairs in a way that maximizes your exemptions and allows you to protect the most amount of property in bankruptcy. Converting nonexempt property into exempt assets can be part of exemption planning. Chapter 13 bankruptcy allows one to take on a repayment plan where you repay a portion of your debts. Furthermore, the courts will appoint a trustee to your case and you must create a repayment plan with this person and then serve the plan to all of your creditors.
While there are ways to protect your house when filing for bankruptcy, that doesn’t automatically mean you’ll keep it. An experienced bankruptcy attorney will know how best to protect your assets. If you have enough income to do these two things while paying your monthly payment and meeting your other Chapter 13 payment obligations, you'll be able to keep your home. Also, if your home is worth less than what you owe, you might be able to remove a wholly unsecured junior loan.
Bankruptcy can harm your credit history and your ability to do certain activities in the future. Therefore, its important to track your credit scores throughout the process and while you work to recover. Debts for death or personal injury caused by the debtorâs operation of a motor vehicle while intoxicated from alcohol or impaired by other substances. To check for common issues in your bankruptcy case, try the ten-question bankruptcy quizit flags areas you’ll want to look into further. Whereas once,;HELOCs;were used almost exclusively for second mortgages, it is becoming increasingly common to find them being used for first mortgages. Youre simply one phone call away from taking the necessary steps to get back to leading a healthy, balanced hassle-free life, recover your money and move on to the next investment opportunity.
Instead, bankruptcy exemption laws protect property people need, like a working car, furnishings, and clothing. If a bankruptcy exemption doesn't protect your property, it's "nonexempt." What happens to nonexempt property will depend on whether you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy. If you file a Chapter 13, you can continue making your payments according to their terms, or add the payments into your payment plan. This is called a cramdown, and it’s used every day to help people like you keep their cars despite filing bankruptcy. The filer typically keeps all of their personal property through the use of bankruptcy exemptions. If all your property is exempt, you may qualify for a “no asset” bankruptcy.
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