Filing for bankruptcy can be scary, especially if you are unsure if you will be able to keep your home. In order to determine whether or not you will be able to stay in your house or move to a new one depends on the following factors.
The Home’s Value
If you’re considering declaring personal bankruptcy, you must first obtain current estimates of the fair market value (FMV) of your home. Make sure your written appraisal comes from a licensed appraiser and not from online home value estimates. While it will cost more to have a New York appraiser, websites like Zillow.com are not good for evidence of value.
Home Debt
It’s also important to know how much is still owed on the home, and where those secured debts are. If there is a first or second mortgage, or home equity line of credit, they will need to be address and considered in decided whether you will be able to keep your home after declaring bankruptcy. A title report can help you determine if there are other loans in your home.
Homestead Exemption
Homestead Exemption gives you the right to exempt equity in the amount of exemption if your home is your primary residence. If you are single, you are entitled to a homestead exemption of $165,550 in equity, and a married couple has $331,100 if they jointly hold the title.
When declaring bankruptcy, there are two options that may allow you to keep your home:
Eliminate any Unsecured Debt with Chapter 7
Chapter 7 eliminates all other debts, such as credit card payments, and still leaves you responsible for paying your mortgage and other living expenses. This option is ideal for people who are still able to pay their typical living expenses and mortgage, but are drowning by other forms of debt. While not everyone qualifies for Chapter 7, it is worth contacting a New York bankruptcy lawyer to see if it’s right for you.
Restructure your Mortgage with Chapter 13
If you do not qualify for Chapter 7, another option for filing for bankruptcy and still keeping your home is Chapter 13. In Chapter 13, you would continue to pay your mortgage payments as they are due, but any over due payments will be built into a plan and cured over a period of 3-5 years.
For questions about filing for bankruptcy, please contact expert Brooklyn bankruptcy attorney at Michael F. Kanzer & Associates, P.C. We have helped hundreds of individuals discharge their debts by providing our clients with expert protection against Chapter 7, Chapter 11, Chapter 12, and Chapter 13 bankruptcy for more than a decade.