How to File for Bankruptcy and Keep Your Home


Many people who are hundreds of thousands of dollars in debt have probably considered the option of filing for bankruptcy. Those who are hesitant are many times hung up on one detail or another that keeps them from moving forward with the bankruptcy process. One such common detail is the fear of losing literally everything, including your home.

Filing for a chapter 7 bankruptcy and allowing your home to be sold in foreclosure is definitely one option available to debtors who are struggling with no real end in sight. For these debtors, allowing their home to sell via foreclosure frees them up to move to a smaller home, apartment or other rental that falls within their budget. Additionally, sometimes these debtors have the ability to stay with friends or family indefinitely, so allowing their lender to foreclose on their home is not as big of a deal.

On the other side of the coin are different group of people who will do anything to avoid losing their family home. Perhaps the home has been in the family for many generations, or the home has special meaning for other reasons. It’s also possible that staying in the home may be the most financially feasible option for some people, and they may not have anywhere else to go if the home is foreclosed upon.

So the question this group of people asks themselves is, “Will I lose my home if I file for bankruptcy?

Filing for bankruptcy while keeping your home is definitely a possibility, but the devil is in the details. Depending on your income, credit score and any savings you may have, it may be possible for you to apply for a loan modification. With the help of a bankruptcy attorney in New Jersey, you could make settlement offers with your creditors that will allow the accounts to close and get you on a repayment schedule so that your credit score can begin to repair itself.

Depending on your age, you may also be eligible for a reverse mortgage, and under certain circumstances, any income tax debt may be dischargeable in a bankruptcy.

Filing for a chapter 13 bankruptcy is your best option when retaining your home is your ultimate goal. A chapter 13 bankruptcy is a repayment plan which reorganizes your debt in such a way that is appropriate and affordable to you. Chapter 7 is a liquidation bankruptcy option, which would mean you would lose your home and many other assets in order to be able to repay your other debts.

For more information about filing for bankruptcy in NJ and keeping your home, call or contact our office today. We offer all new clients a free consultation.

Image Credit: Trevor Butcher (flickr)

6 Responses to How to File for Bankruptcy and Keep Your Home

  1. Pingback: Bankruptcy and SSDI: Will I Lose My Disability Income? | Veitengruber Law

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  3. Pingback: Will I Lose Everything if I File for Bankruptcy? | Veitengruber Law

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