If you’re like most homeowners, you may be wondering, “can I keep my home if file bankruptcy?” In most cases, you can keep your home when you file bankruptcy San Diego, with the help of an experienced lawyer. Generally, if the equity in your house is covered by your exemptions, or if you have no equity in your house, you will be able to keep your home when you file bankruptcy San Diego. Of course, you will have to keep making your mortgage payments, but you would have to do that anyway, even if you did not file for bankruptcy relief. In addition, if you have missed your mortgage payments, your lawyer will have to file a Chapter 13 case for you, so that you can repay your missed payments.
To determine whether you can keep your home when you file bankruptcy, you need to discuss three factors with your lawyer: (1) whether you have equity in your house, based on the value of similar houses for sale in the San Diego area; (2) whether you are on time on your payments; and (3) if you are behind on your payments, whether you are willing to repay your missed payments.
In order to keep a home, the equity in the home cannot exceed the amount of equity you are allowed to have under your applicable exemptions. If you have more equity in the home than your exemptions allow, then the home will be liquidated (sold) and the nonexempt proceeds (the amount that is not covered by your exemptions) will be used to pay your creditors.
If you are on time on your monthly mortgage payments, then you can keep your home, whether you file under Chapter 7 or Chapter 13, as long as you continue to make your payments and stay current on your home loan debt.
Your mortgage lender’s right to foreclose is dictated by state law, not by Federal bankruptcy law. If your property is located in San Diego County, or anywhere in the State of California, then your lender cannot foreclose on its deed of trust lien as long as the loan is current, irrespective of whether you have filed bankruptcy.
If you behind on your home loan payments and want to keep your house in bankruptcy, you will need the help of an experienced Chapter 13 attorney to help you file a Chapter 13 case and repay your missed mortgage payments over a 3 to 5 year repayment plan.
If you are willing to repay your missed mortgage payments, and your lawyer can help you propose a viable Chapter 13 repayment plan that is accepted by the Court, then you will be able to keep your house, even if you are behind on your monthly mortgage payments.
By proposing a Chapter 13 plan that brings your mortgage payments current, and by completing that plan, you will effectively be bringing your home loan payments current, so there is no reason for your lender to foreclosure. Therefore, Chapter 13 can permanently stop foreclosure of your home.
Call us today to set up a free consultation with a bankruptcy lawyer to discuss whether you will be able to keep your home in bankruptcy, and what it will take on your part in order to keep your home when you file bankruptcy San Diego.