Will I Lose My Home if I File Bankruptcy?
I recently had one debtor that was terrified about losing her house when she filed for her Chapter 7 bankruptcy. I explained to her that when she files for a Chapter 7 bankruptcy, her house is fully protected, whether we use the state exemptions or the federal exemptions. The difference between the two is that the state exemptions will protect the house fully and the federal exemptions will protect the house only partially if you have a lot of equity in the home. I reassured her that if she is current with making her payments to the mortgage company, that even filing a Chapter 7 bankruptcy, she will not lose her home. I did explain to her that it would be wise to sign an affidavit with the mortgage company, so that they will continue to report the payments being made to the credit reporting agencies. This will help her if she ever wants to refinance or purchase another home. I explained the process as it relates to her case and I tried hard to make her feel reassured that everything will be fine with her home that she is so worried about losing, but I get the feeling that she still has doubt in the back of her head.
If you have any questions about your chapter 7 bankruptcy and your assets, contact your bankruptcy attorney to receive clarification if you are concerned.
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