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Bello, Reilley, McGrory & DiPippo Attorneys At Law

Call for a FREE consultation :
610-992-1300

24-hour Bankruptcy Hotline:
610-992-1300, ext 207.
Daniel T. McGrory, Esquire.

Can bankruptcy help you remain in your home?
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Can bankruptcy help you remain in your home?

On Behalf of | Nov 18, 2022 | Bankruptcy

When the burden of debt becomes too much to bear, bankruptcy can provide relief. However, the fear of losing your home to foreclosure or eviction might give you pause.

Fortunately, it is often possible to remain in your home after filing for bankruptcy. In fact, bankruptcy can sometimes help you keep your house or apartment. How easy this is to do depends on your circumstances and the type of bankruptcy you file.

Avoiding eviction or foreclosure

When you file for bankruptcy, an automatic stay immediately takes effect. The automatic stay forces most creditors to cease collection efforts and suspends foreclosure and eviction proceedings.

Quick action is essential, however. If foreclosure or eviction proceedings have already begun, filing for bankruptcy may not protect you.

Paying your mortgage under Chapter 13

If you have a job, you might be eligible for Chapter 13 bankruptcy. Chapter 13 allows you to make a payment plan and pay off all or part of your debt over three to five years. This can help you pay your mortgage and keep your house.

Keeping your house under Chapter 7

Chapter 7 bankruptcy involves liquidating non-exempt property. If you own a house, the federal homestead exemption protects a certain amount of equity. If you have little or no equity after deducting the exempt amount, the court will likely allow you to keep your house. However, if the remaining equity is a significant amount, the court may order the sale of your property to pay your debts.

You stand a better chance of keeping your home under Chapter 7 if you are current on your mortgage payments.

Filing for bankruptcy does not always mean you will lose your home. In many cases, it can help you keep your house or avoid eviction.