Bankruptcy and Your Home
One of the scariest parts about filing for divorce is the fear that you may lose your house in the process. It can be paralyzing to think that the most valuable object in your life could be lost virtually overnight, a house you have spent countless hours in and fixing up, keeping in shape, mowing the yard of. It’s natural to be possessive about your home and worried that you could lose it.
As a homeowner, you need to be familiar with the way bankruptcy can affect your house. If you’re considering bankruptcy and have questions about how this will affect your home, contact the West Palm Beach bankruptcy attorneys of Eric N. Klein & Associates, P.A. by calling 561-353-2800.
Chapter 7 vs. Chapter 13
The big deciding factor over whether you will lose your house as a result of declaring bankruptcy rests on what chapter you are filing under. The two common types of bankruptcy for individuals to declare are Chapters 7 and 13, the differences of which can determine the fate of your home.
- Chapter 7. Chapter 7 bankruptcy is liquidation bankruptcy, which means that creditors can seize your property and sell it to recoup the debt you were unable to pay back. Most primary residences and vehicles are protected from liquidation as they are considered “exempt property”. However, if you have multiple homes or vehicles, these may be sold to pay back creditors.
- Chapter 13. Chapter 13 bankruptcy can almost always save homes from a foreclosure sale. Chapter 13 is a restructuring bankruptcy, which allows you to propose a plan to pay back your creditors over a period of time. The downside is that Chapter 13 requires a steady income and a fair amount of expendable income, since you will be allocating a good deal of your paycheck towards paying off your debt.
Contact Us
If you are considering filing for bankruptcy in order to stop foreclosure on your house and are interested in legal representation, contact the West Palm Beach bankruptcy attorneys of Eric N. Klein & Associates, P.A. by calling 561-353-2800.
