Filing bankruptcy can be scary when you do not know what to expect. Your lawyer can help ease your fears by providing information that is specific to your case. However, if you want to get a general idea of what will happen when you file bankruptcy, it is a good idea to do some research concerning what happens when and after you file. Having a home is a major concern, so learning how to keep your home after bankruptcy is a great place to start.
Differences Between Chapter 7 and Chapter 13
The main difference between Chapter 7 and Chapter 13 is what happens to the debts and how they are handled. In Chapter 7, they will be discharged, assuming the bankruptcy is successful. In Chapter 13, debts will be reorganized. This means that your debt is not dismissed, but put into payment terms that you can live with over a period of time. In either case, it is still possible to keep your home. However, if you are experiencing threats of foreclosure and haven’t filed bankruptcy, you can get more information regarding foreclosure defense here (http://www.zerodownbankruptcy.com/foreclosure-defense/).
What Is Exempt Property?
The court has no desire to see you homeless or unable to get to your job, medical appointments, and other obligations. For that reason, they take things like house payments into consideration. In many cases, your house is exempt from being taken by the creditors or trustee based on its value. Even if it is taken and sold, the court will give you the exempt amount—provided the house sells for enough to bring that in. Read more about how a Florida bankruptcy attorney can help you here (http://www.zerodownbankruptcy.com/).
The Value of Your Home Matters
Home exemptions are based on the value of the home. The court can’t very well let you keep a multi-million dollar home while you file bankruptcy on the rest of your debts. Instead, the trustee may sell the home and give you the exemption amount allowed at that time.
These rates currently fall in the area of $160,000, so anything that is brought in beyond that would apply to your current debts. If your home is valued at less than that, the court would not make you sell the home. The amount you pay for your home would be deducted from what you currently make in order to determine the amount of your disposable income.
It’s important to keep in mind that the ability to keep your home and other assets in bankruptcy vary according to each person’s situation. However, you have a much better chance of protecting your home if you have the assistance of qualified bankruptcy attorneys on your side.
Please share this post online with friends and family members considering bankruptcy who may have concerns about keeping their home and property.
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