Filing for bankruptcy is a serious decision that warrants careful consideration, but if you count yourself among the many Americans who feel like they are drowning in debt, doing so may give you the fresh financial start you desire. If you are thinking about filing for bankruptcy and are also a Louisiana homeowner, you may have questions about what could potentially happen to your property once you decide to file.
Ultimately, whether you should be able to keep your home after filing for bankruptcy will depend on certain factors, among them the type of personal bankruptcy you pursue. Chapter 7 bankruptcies, which are the most common form of bankruptcy, have certain income limits, and are therefore common among those who do not have enough money to pay off their debts. Chapter 13 bankruptcies, meanwhile, give those who have the ability to pay back at least some of what they owe a chance to get their financial affairs in a more manageable state. Each option differs in terms of whether you might be able to keep your home.
Chapter 7 bankruptcies
Whether you should be able to keep your home after you file for Chapter 7 bankruptcy will depend on whether the equity you have in it falls below Louisiana's exemption amount ($35,000 in equity). If it does, it becomes exempt from seizure. If it does not, your home may be sold so its value can go toward your debts.
Chapter 13 bankruptcies
When you pursue a Chapter 13 bankruptcy, you are agreeing to a set payment plan that should help you get back on top of your finances. As long as you adhere to the terms of your repayment plan and keep up with mortgage payments, you can typically keep your home in a Chapter 13 bankruptcy case.
In summary, deciding to file for bankruptcy does not automatically mean you will lose your home. It depends on the specifics of your situation, but you may have other options at your disposal that can help you avoid doing so.
Disclaimer - Attorney Advertising. Under Federal Law, we have been designated a Debt Relief Agency and we help people file for bankruptcy relief under the Bankruptcy Code. This information is not intended as legal advice and no attorney-client relationship is created. Results may vary. Results not guaranteed. Dramatization - not actual clients in pictures and videos. Thomas C. McBride, attorney in Alexandria, LA.