Do you lose or keep your primary residence if you file bankruptcy?
I’ve been looking at an informational site and couldn’t find anything that would answer this question plain and simple. For Chapter 7 it said you could keep clothes and furnishings and something else but it wasn’t house. It said everything of value had to be liquidated to pay the debts. For Chapter 13 it said something about mortgage, but it made it sound like it had to be paid off in 5 years, which I know for what my sister owes on her house, she’d only come close if they weren’t charging any interest during that time. If worse comes to worse for my sister and she ends up with her cars going into repossession and house into foreclosure, and she files bankruptcy, can she keep her house and one car, or would she have to sell them and start from rock bottom all over again?
chapter 13 is when you tell the attorney all your debts and they contact the courts to get interest rates lowered and you only have to pay FAIR market value of what it is worth, NOT what you actually owe. For instance, if you still owed 100,000 on your home but it was only worth lets say 35,000 then you would only have to pay the 35,000 to the courts to keep it. The trustees will negotiate for you to pay your bills at a major interest rate reduction or NO interest in most cases. PLUS they will set up a payment plan for a rate which you can afford to re-pay the debt.
February 21st, 2010 at 5:14 amI speak from experience because my hybby and I filed ch. 13 2 yrs ago. we were well over 100,000 in debt and got it reduced to 60,000 payable over 5 yrs. Considerable less a month than the rates we were paying to all the companies and places. We owed 35,000 yet on our home and told the attorney it was only worth about 10,000 and that is all we are responsible to pay back to the mortgage co. The laws governing chapter 13 have changed since then though. Talk with a bancruptcy attorney. Most will consult for free and explain it all to you. Good luck
You can keep your house when you reaffirm your debt and one auto per adult in the home. When you reaffirm it is as if you never declared bankruptcy on those items, so make sure before you sign the reaffirm papers your payments are current.
I did not file chapter 13 so I am not sure but basically you file a repayment plan with your creditors and the repayment amounts can change from year to year, but you are required to have the debts paid off within 5 years (I cannot imagine that applies to a mortgage though).
February 21st, 2010 at 5:14 amAs long as you can work out a payment arrangement with the mortgage company, you can keep the house. You cannot put the mortgage in the bankruptcy, but if you prove hardship the mortgage company will often work out a payment plan with you.
Same with the car, you need to discuss the hardship and see what they can work out.
The key is communicating with them, no matter how hard it is. Avoiding them will not make the problems go away.
February 21st, 2010 at 5:14 am