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Do I Get to Keep My House if I File for Bankruptcy?

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One of the most worrisome and stressful things in life is the fear of losing a home because of an inability to make mortgage payments in full or on time. If you are struggling with debt, are having your wages garnished, or do not have an income and cannot make your mortgage payments as a result, you may be wondering if filing for bankruptcy will allow you to keep your house. Here is an overview about what you need to know about how the bankruptcy process affects your homeownership – for more in depth information, contact the Whitten & Whitten for a free consultation.

Putting the Brakes on the Foreclosure Process

While whether you will be able to keep your house or not will depend upon your financial situation, if you file for bankruptcy, an automatic stay will be placed on the foreclosure process (if it has begun) and on your lender’s ability to contact you to collect debt. The automatic stay begins as soon as you file for bankruptcy, regardless of whether you apply for Chapter 7 or Chapter 13 bankruptcy. Because of this, you are given additional time to deal with the possibility of foreclosure, and may even be able to figure out a way to keep your home.

Will I Be Able to Keep My Home by Filing for Bankruptcy?

Keeping your home is likely your top priority, but whether or not you will be able to do so will depend upon the specifics of your situation and the type of bankruptcy for which you file. If you file for Chapter 13 bankruptcy, then it is highly likely that you will be able to keep your home. This is because in Chapter 13 bankruptcy, you are given a chance to reorganize your debts and pay them off through a viable payment plan which typically spans three to five years’ time.

In Chapter 7 bankruptcy, on the other hand, your debts are discharged, but in exchange any non-exempt property is liquidated to pay your creditors. There is a homestead exemption in Indiana during bankruptcy of up to $17,600.

Other Alternatives to Keeping Your Home

Bankruptcy is not the only way to keep your home if foreclosure is looming. You may be able to communicate with your lender to renegotiate the terms of your loan or you can apply for a loan modification.

At the Whitten & Whitten, we know how important it is to you that you keep your home, and we know how scary the thought of losing your home can be. If you are struggling with making payments on your home and aren’t sure where to turn next, contact our law offices today. Our lawyers have the experienced in bankruptcy law that your case deserves, and have been working for clients in Indiana for more than 20 years.

You can reach us online, or by phone, today. A consultation is always free.

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