Home equity is considered an asset in your bankruptcy. … In Chapter 13 bankruptcy, you must pay the value of your nonexempt assets to your unsecured creditors through your repayment plan. As a result, the amount of equity you have in your home can play an essential role in your decision to file for bankruptcy.
Correspondingly, can I lose my house if I file bankruptcy?
If you are the only owner of your home, your secured debts (for example, a mortgage) are paid first out of the sale proceeds. The remainder of the sale proceeds are given to the trustee to pay your unsecured debts and trustee fees. Any remaining funds after this distribution will be given back to you.
Regarding this, do I still own my home after Chapter 7?
If you kept your house throughout the bankruptcy process, you are free to keep your home after the bankruptcy – as long as you continue to pay the mortgage. It may be that after you are free of all the rest of your debt you will be able to afford the mortgage payments easily. If so, you’ll be able to keep your house.
Do you have to pay mortgage after bankruptcy?
When you file Chapter 7, you are no longer legally obligated to repay the loan. “Legally obligated” is the key phrase here because Chapter 7 does not get rid of the lien on the property. Your lender still has a right to the property if the debt is not paid. So basically, you don’t have to pay your mortgage.
The federal government, as well as 42 states, have a homestead exemption that allows a person filing for bankruptcy to protect a certain amount of equity in a home. The federal exemption, which changes every three years, is $25,150 until April 2022. State exemptions may be higher or lower.