How to Save Your Home after Filing Bankruptcy
Choosing to file for bankruptcy is a difficult decision, and it’s not one that many people do lightly. Often, it’s someone’s last-ditch effort to dig themselves out of insurmountable debt and find a way back on their feet. But many people may hold back on filing because they fear that they’ll lose their homes as soon as they file. The good news is that there are ways to stay in your home when filing bankruptcy. Keep reading to learn more, and be sure to find a bankruptcy law firm in Mattoon, IL, to help you file your bankruptcy properly and protect your assets.
Filing Chapter 13
In most cases, the simplest and easiest way to ensure you don’t lose your home during bankruptcy is to file a Chapter 13 bankruptcy. There are actually two types of bankruptcy filings available for individuals: Chapter 13 and Chapter 7.
A Chapter 13 bankruptcy is considered a reorganization of your debt; it consolidates all of your debt and creates a repayment plan that works for your finances. You are still responsible for all (or at least most) of the debt you owe, but it stops collection attempts on your overdue debts, including foreclosure actions on your home for overdue mortgage payments. A Chapter 13 bankruptcy allows you to catch up on past-due mortgage payments and keep your home instead of surrendering it to the bank.
If Chapter 13 doesn’t work for you for whatever reason, it’s still possible to file a Chapter 7 bankruptcy and keep your home. A Chapter 7 bankruptcy liquidates many of your assets in order to repay your overdue debts. However, this doesn’t have to include your home. When filing for bankruptcy, you can use bankruptcy exemptions to protect some of your property from being liquidated to pay those unsecured debts.
There are limits on exemptions that can vary by state as well as some federal exemptions that can be levied in your favor. However, these can get complicated, and you may have to choose between using state or federal exemptions, depending on what’s most beneficial to you. This is why we strongly recommend that you use a bankruptcy lawyer to assist you through this process, as they’ll be able to ensure you’re using the most advantageous bankruptcy exemptions to protect your property.
It’s also important to note that bankruptcy exemptions can be applied to more than just your home. It can also be used to protect vehicles, clothing, retirement accounts, tools you use for your job, and other types of personal property from liquidation to repay your debts. If you have other property you want to ensure is protected, be sure to discuss it with your attorney so we can take proper steps to protect your possessions.
Work with an Attorney
By and large, the best way to keep your home or other property when filing for bankruptcy is to work with affordable bankruptcy lawyers in Mattoon, IL. Bankruptcy laws are often confusing and complicated, and the last thing you want is for a misunderstanding of legal jargon to lead to you losing your home. Please, reach out to the Law Offices of Winter-Black & Baker today so that we can help you file properly and keep your home. Call now to schedule your consultation.