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Can You Declare Bankruptcy And Keep Your House

When Is The House Liable For Seizure

If I FIle for Bankruptcy Can I Keep My House and Car? | Learn About Law

Determining whether the house has equity is not enough to decide whether it will be liable for seizure.

In Ontario, the Execution Act rules clearly on the issue. Under subsections;2 and 2, any principal residence with equity $10,000 or less may not be seized. Conversely, a person declaring bankruptcy cannot keep their house if the equity exceeds $10,000.

In Quebec, the law is not as specific. Each situation must be analyzed individually.

It is up to the LIT to make a decision. They must determine whether selling the house will result in a profit for the benefit of creditors.

The LIT must therefore anticipate the costs associated with selling the house, such as

  • Mortgage payments;
  • Other maintenance costs ;
  • Etc.

Having made the calculations, the LIT will seize the house if they deem there are profits to be made by selling it. Otherwise, the owner can keep the house, as long as they continue to make payments.

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Ask Your Lawyer About North Carolina Bankruptcy Exemptions

Different states might allow certain exemptions when filing for bankruptcy, so it may be in your interest to ask your lawyer which exemptions you might qualify for. Bankruptcy exemptions can help people retain some or most of their assets when filing Chapter 7 bankruptcy, or it can serve as a way to refinance your debts if you are filing Chapter 13 bankruptcy. Your lawyer may go into more detail and explain which bankruptcy filing might be more suitable for your financial situation.

In North Carolina Cases, debtors are usually prohibited from using the federal bankruptcy exemption system. To accommodate this barrier, people who want to file for bankruptcy may use state exemptions to help them. Below are two aspects of North Carolina exemption law that might help you not lose your house if you file Chapter 7 bankruptcy.

How To Know If Your Home Is Exempt

Figuring out whether your home is exempt is a simple math problem if you owe more than the market value, its exempt. Be sure to check what the exemption rules in your state are, because thats part of the math. Less simply, the paperwork you fill out requires you to list what you owe, the exemption and your equity. You file the items you believe are exempt in Schedule C. This not only includes your house, but you also get an allowance for your car, and items like furnishings, things necessary to do your job, and more. Its always a good idea to get help from an expert in bankruptcy wholl guide you through this complicated procedure.

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How Long Will Selling The Home Take

Trustees will typically sell the home in a timely fashion. Generally, an individual remains bankrupt for 3 years. Trustees are required by law to sell a home within 6 years after an individuals bankuptcy ends. This allows 9 years to arrange the sale. If the trustee does not sell the home within this period, ownership of the home could be returned to the individual.

The 6 year rule only applies if the trustee is aware the home exists. If a home is not disclosed in the bankruptcy documents, the trustee will have 20 years to take possession and sell the home.

Surrender The Property In Bankruptcy

Can You File Bankruptcy and Keep Your Home in MN?

The third option is to surrender your property. If you surrender the property, you are walking away from it and forfeiting it to the Chapter 7 trustee. Further, you are not allowed to defend a foreclosure action against your home after you receive the discharge. See bankruptcy case Failla v. Citibank . When you choose to surrender real or personal property, you will no longer be personally liable for the debt connected to that piece of property. The surrender option exists to give you a fresh start. Therefore, a creditor cannot later come after you for the amount discharged from your decision to surrender.

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How Do I Know How Much Equity I Have

You can calculate your homes equity by taking the value of your house, and subtracting the amount you owe on your mortgage and the currently owed property taxes from this value.

House value amount owed on mortgage currently owed property tax = Equity

In most personal bankruptcies, the home must be sold so that this equity value can go to your creditors.

The Individual Insolvency Register On Annulment

Once notice of the annulment is received your bankruptcy will be removed from the Individual Insolvency Register after:

  • 28 days if the bankruptcy order shouldnt have been made
  • 3 months if the debts were paid in full or an IVA has been agreed

If an IVA has been agreed, details of this will appear on the register.

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If Youre Having Trouble With Your Mortgage Payment

Its probably best to start by talking about what to do if youre having trouble with your mortgage. Its our expertise, but also for many people, its their single biggest monthly expense. If you find yourself struggling, you have a few options for mortgage help.

The most preferable option for most people might be to look at a modification. A mortgage modification involves temporarily or permanently lowering your interest rate and/or extending your term so that you can more easily afford your monthly payment.

If youve been over things with your servicer and can afford to make a payment at all, one option might be a short sale. In this scenario, you might know you cant sell your home for what you owe on your mortgage. However, if you can prove hardship, your lender might be willing to let you do a short sale where they work with you to sell the property for less than what you are.

Depending on state law, a lender may be able to go to court and get a judgement against you for the difference between what the property sells for and what you actually owe, so thats something to be aware of.

Finally, your lender could approve a deed in lieu of foreclosure. Under this arrangement, you sign the property over to your lender and they then sell the home. In exchange for keeping the home in good shape, your lender may forgive some or all of the difference between what you actually owe and what the property can be sold for.

Can I File Bankruptcy And Keep My House And Car

Bankrupcty Can You Keep Your House?

You calculate the net equity in your home by subtracting your mortgage payoff and the total of other valid liens filed against the house title from the current fair market value of the home.;

For example, if your home is worth $100,000 and you owe $80,000 on your mortgage, the net equity in your home equals $20,000. However, if you apply the federal bankruptcy exemption for homes of $25,150, your homes equity is protected from unsecured creditors if you file for bankruptcy relief. Remember, for married couples, the homestead exemption doubles if both debtors are on the title to the home and file a joint bankruptcy petition.

Your bankruptcy attorney carefully analyzes your property against the available bankruptcy exemptions before you file for Chapter 7 or Chapter 13. If there is a risk that you could lose property by filing bankruptcy, your attorney discusses the risk with you so that you can make an informed decision on how to proceed. In some cases, you might have alternatives to filing bankruptcy to get rid of debt.;

So if you are a senior and looking to file bankruptcy, you may have some additional things to help keep your home. For example, retirement income is generally untouchable in bankruptcy, and many retirees can avoid losing their homes by using the homestead exemption.

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Keeping Your Home In Chapter 13 Bankruptcy

The good news about filing for Chapter 13 bankruptcy is that its designed to allow you to keep your house. With Chapter 13, you, the bank and your creditors all decide on a repayment plan that takes three to five years, but your assets are not sold off. Once the plan is completed, your unsecured debt is discharged. The trick, of course, is making it to the end.

The plan that is worked out with the court and your creditors will include a way to catch up on and pay your mortgage if you can afford it.

Under a Chapter 13 repayment plan, if youre behind on your mortgage the plan will work out how you pay the past due payments over the three to five years, but you also must make the current monthly payments.

Get Your Free Case Evaluation

If you have further questions about protecting your house through the bankruptcy process, contact any of our convenient Ohio offices by calling . Offices in Columbus, Cleveland, Akron, Youngstown, Canton and throughout Ohio. Someone is available six days a week to discuss your options.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

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Dealing With The Equity In Your Home

Another issue for homeowners that declare bankruptcy is the in their house.; Equity is the amount of money you would receive if you sold your house.

For example, if your house sells for $200,000, but the mortgage is $150,000, and the real estate commissions and legal fees are another $10,000, the equity in your house would be the difference, or $40,000.

The specific rules about how equity in your home is treated in a bankruptcy are different in each province, so you should for an explanation of the law in your province.; In some provinces you are permitted to keep some equity; in other provinces all house equity is an asset of your estate, and must be turned over to the trustee.

This does not mean you lose your house, but you do lose the non-exempt equity.; For example, if you have seizable house equity of $10,000, you could allow the trustee to sell your house, or you could make an arrangement with the trustee to pay the $10,000 in equity into your bankruptcy estate .

Of course if you are declaring bankruptcy it is unlikely that you have $10,000 in cash. You still have options however. You can borrow the funds from family and friends or arrange to pay that amount to your trustee in monthly installments during your bankruptcy. ;This will however increase the total monthly payment you need to make. If you are in 9 months, what happens if you cant afford these payments? ;The solution could be to look to a consumer proposal.

Experienced New Jersey Bankruptcy Attorneys Explain What Happens To Your House And Car In Chapter 7

What Property Can You Keep If You File Bankruptcy?

Chapter 7 bankruptcy;provides many benefits, including the automatic stay and the Chapter 7 discharge. However, many people are concerned about what Chapter 7 bankruptcy provides many benefits, including the automatic stay and the Chapter 7 discharge. However, many people are concerned about what will happen to their homes or their vehicles if they file Chapter 7. Our New Jersey bankruptcy lawyers are happy to discuss what could happen with your house and your car in a Chapter 7 bankruptcy case.

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If You Have A Loan Secured By The Property Will The Bank Agree To A Reaffirmation Agreement

If you own the property in question free and clear, then Step 2 should be the end of your analysis. Usually however, property such as residences and vehicles are secured by a loan. If you want to retain the property in question, you will have to reaffirm the loan. This is accomplished by executing a contract with the bank that holds the loan, called a reaffirmation agreement, whereby you and the bank both agree that the loan will not be wiped away in bankruptcy with the rest of your debt. After your bankruptcy, you will still have the debt represented by the loan and still be required to make payments as you were prior to the bankruptcy.

If you do not execute a reaffirmation agreement and file it with the court, you will no longer be responsible for the loan, but the bank will have the right to collect the property secured by the loan .Banks are almost universally willing to execute reaffirmation agreements.

If You’re Overwhelmed By Your Debts Bankruptcy Is Just One Option

If you have large debts that you cant repay, are behind in your mortgage payments and in danger of foreclosure, are being harassed by bill collectorsor all of the abovedeclaring bankruptcy might be your answer. Or it might not be.

Bankruptcy can, in some cases, reduce or eliminate your debts, save your home and keep those bill collectors at bay, but it also has serious consequences, including long-term damage to your . That, in turn, can hamper your ability to borrow in the future, raise the rates you pay for insurance, and even make it difficult to get a job.

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When The Trustee Abandons Property

In Chapter 7, the Chapter 7 trustee cannot take any exempt property. However, if you have nonexempt property, the trustee can sell it and use the proceeds to repay your unsecured creditors. Sometimes the trustee decides that it’s not worth seizing and selling your nonexempt property. In that case, the trustee may “abandon” the property.

The trustee will abandon property in several situations. Here are a few.

The Property is Upside-Down

Secured property is “upside-down” when the value of the loan secured by the property is more than the market value of the property. Car owners are often upside-down on their car loans. For example, a debtor takes out a five-year loan of $25,000 to buy a brand new Toyota, but due to losing her job the debtor must file for bankruptcy two years later. The debtor still owes $20,000 on the Toyota, but the market value is only $15,000. The debtor is now upside-down on the car loan.

In the example above, the trustee will likely abandon the car. Once the secured creditor is paid, there will be no additional funds with which the trustee can pay unsecured creditors. Therefore, it is not worth the trustee’s time or expense to liquidate that car.

Costs of Sale and the Trustee’s Commission

  • surrender the property to the creditor
  • redeem the property by paying the creditor the market value of the property
  • reaffirm the debt , or
  • keep the property without reaffirming the debt.

Learn more about keeping a car in bankruptcy.

Can I File A Chapter 7 Bankruptcy Case Without An Attorney

Chapter 7 Bankruptcy – Keeping Your House

Bankruptcy attorneys help individuals who need debt relief file a bankruptcy case. However, the average attorney fee for a Chapter 7 bankruptcy lawyer can be $1,200 to $1,500. In addition to the attorney fee, you must also pay the filing fee to the bankruptcy court and the fees for your required bankruptcy courses.

If you can afford to hire a bankruptcy attorney, it is usually best to do so. Bankruptcy law can be confusing when you are trying to file a Chapter 7 case without an attorney.

You can file a bankruptcy case without an attorney and although itâs great to have an attorney, itâs not always necessary. If you canât afford to hire a lawyer, check if you’re eligible to use Upsolve’s free web app to prepare your bankruptcy forms

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How Provincial Exemptions Can Impact Your Home In Bankruptcyexample Calculations

So using Ontario as an example calculation, if you live in Ontario with a house worth $250,000 and your mortgage is $245,000, then you get to keep your home because you only have $5,000 in equity and the province allows you have up to $10,000 in net home equity and still keep your home. The $5,000 of equity would become even less once potential selling costs are subtracted.

However, if your home is worth $250,000 and your mortgage is at $200,000, then you would have to either buy out the surplus or sell your home to pay your creditors with the proceeds because your net equity would still be over the $10,000 limit .

Keeping Your Car In Chapter 7 Bankruptcy

In Chapter 7 bankruptcy, most of your debts are discharged . In return, you must give up nonexempt property — the bankruptcy trustee sells the property and uses the proceeds to pay your unsecured creditors.

Whether you can keep your car in Chapter 7 depends on whether your equity is exempt, and whether you are behind in payments.

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Are There Credit Card Debts That You Cant Erase During Chapter 7 Bankruptcy

In a few cases, a debtor may not be able to discharge credit card debt. A creditor may file an objection to the debtorâs discharge in some circumstances. The objection is an adversary proceeding, which is a lawsuit within the bankruptcy case.

Two reasons why credit card debt may not be dischargeable are:

If you use your credit cards to charge $675 or more in âluxuryâ goods or services within 90 days of filing your Chapter 7 petition, the court may find that the credit card debt is non-dischargeable.

Luxury goods and services can include more than just really expensive items or property that you own. âLuxuryâ can mean anything that you donât necessarily need to stay on your feet or support your dependents. Therefore, if you have charged $675 or more in credit card debt recently, you may want to wait at least 90 days from the last credit card charge to file a Chapter 7 bankruptcy case.

If you used the credit card to pay for debts that you could not typically get rid of in a bankruptcy case, that debt wonât likely get erased. For instance, if you use your credit card to pay child support, alimony, back taxes, or student loans, the credit card company may object to your discharge.

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