Many people who are considering filing for bankruptcy protection are hesitant to do so because they fear losing their house. The thought of having to uproot your family and find a new place to live may be even more frightening than financial struggles.
However, bankruptcy is meant to help you, not hurt you. If you own a home and are drowning in debt, there are ways you can file for bankruptcy and still keep your home.
Are you up to date on your mortgage?
If you haven’t fallen behind on your mortgage payments, you can keep your home under Chapter 13 bankruptcy protection. This is under the condition that you can afford to maintain the payments and your other obligations while in your bankruptcy repayment plan.
In Chapter 7 protection, those who are current on their mortgages will have to examine the amount of equity they have in their houses and their homestead exemption entitlement. The amount of equity you hold depends on the market value of your house compared against the balance of your home loans. So if you’re house is worth $250,000 and you owe $230,000, you have $20,000 of equity in your home.
There is no homestead exemption NJ state law, but New Jersey filers are allowed to choose the federal exemption. If your home equity comes to $22,975 or below, you can choose to take the federal exemption and keep your home, provided you can make the payments. To fully understand your exemptions, speak to a qualified NJ bankruptcy attorney, as exemption amounts may change over time.
Are you behind on your mortgage?
The best way to keep your home is you have fallen behind on the mortgage is to file for Chapter 13 bankruptcy protection. This is provided that you can get the payments up to date and continue to make them going forward in addition to your other financial obligations. You would have to resume making payments immediately after the repayment plan was accepted.
If you’re behind, it will be much more difficult to keep your home in Chapter 7 bankruptcy. Your best strategy would be to consult with NJ bankruptcy attorney, Joel R. Spivack, Esq.
Contact the Law Office of Joel R. Spivack today for a risk-free consultation to discuss your situation and your options. For more than 20 years, Joel R. Spivack, Esq. has been an industry leader in bankruptcy protection and filings.