Bankruptcy questions?? Need some clarification help?

Question

If you file Ch. 7 to clear your debts, does that mean you have to lose your house in the process. What if you wanted to file Ch. 7 but still keep your house? Is that possible??

Answer 1

Whether you keep your house in chapter 7 depends on the equity you have (difference between value and debt) and the exemptions available in your state. They vary greatly. Some states, like New Jersey, have no exemptions. Some states like Florida and Texas have unlimited exemptions. Massachusetts has just raised its exemption to $500,000, I believe. Illinois only allows $15,000 exemptions per owner for homestead.

Whether you can claim your state's exemption may depend on how long you have lived there and whether you have not misbehaved in certain ways (think Enron). Even if there is some equity after exemption, you still may keep your house if the cost of liquidating the house would not leave anything for creditors.

Answer 2

Yes it is possible, all you have to do is file a reaffirmation agreement with your mortgage company. This states that you want to continue paying them as agreed. Nothing will change as far as your payment or term.

You will need to contact them and request that they continue to report to the credit bureaus. This is because when you file chapter 7 everything must be included at first, then you file the reaffirmation agreement and you home comes out of the bankruptcy.

I went through this 6-years ago and the new laws have not changed this part of chapter 7 bankruptcy.

And by the way bankruptcy laws are Federal not State.

Answer 3

Under the old laws you could file and still keep your house. I'm not sure about the new laws because I quit working in a law office about 4 years ago. Each state is different. I would call a bankruptcy attorney and schedule a consultation - the first one is usually free and they are VERY nice and VERY understanding people. If you need help finding an attorney call your state's bar association and they can help you find one that best meets your needs.

Good luck.

Answer 4

You can file and for the things you want to keep you can fill out a reaffirmation paper for those items, I know this because I filed back in January for the same thing.

Answer 5

definite and no - once an contract is universal for processing then, presented the debtor is entitled to grant such an contract (see s.185C(4)), a creditor is constrained from itemizing a default purely in respect of a "frozen debt" (i.e. it would not ward off someone taking action in respect of yet another debt), and that's restricted in time till between the events listed in s.185F(a million)(d) to (f) - note the lapsing in s.185G.

Answer 6

Here are the US bankruptcy laws. You might be able to find something for your state.

http://www4.law.cornell.edu/uscode/html/uscode11/usc_sup_01_11.html