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Can I keep my house if I file for bankruptcy? 

“Will I lose my home if I file for bankruptcy?” Many people who file for bankruptcy keep their homes.   Filing for bankruptcy protection is often what helped them keep their homes.   

Chapter 7 bankruptcy can help avoid foreclosure.  By eliminating unsecured debts (for example, credit cards and medical bills), monthly expenses are reduced which can enable the homeowner afford and pay the mortgage payments.  But the amount of equity (home value minus loans) in the house must be low enough so that the home is exempt (protected) from liquidation in a Chapter 7 bankruptcy.  See California Homestead Laws.

Chapter 13 bankruptcy can give the homeowner time to catch up the missed mortgage payments and stop the foreclosure process.  Further, certain unsecured debts can be reduced or elimnated. Additionally, in certain limited circumstances, second trust deeds or HELOC loans can be stripped down and, in many cases, reduced significantly.

Supplementary or Related Articles:

Should I keep my home if I file for bankruptcy?

Loan Modification and Short Sale in Relation to Bankruptcy

Loan Modification versus Bankruptcy

What is the effect of  a bankruptcy discharge on secured mortgage debt?

Foreclosure and Bankruptcy

2009, 2010


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