When financial pressures mount, the anxiety you feel can quickly escalate — especially if you’re worried about losing your home. You think bankruptcy may be your only solution, but you hate the idea of giving up the home you’ve loved, tended and lived in for years.
Take heart. As long as you can afford the payments, there’s a fair possibility that you will be able to keep your home. Here are some of the factors that will ultimately determine what happens:
- The value of your home: If you have a lot of equity in your home, that could be considered assets that can be used to pay off your debts — although exemptions sometimes apply.
- The type of bankruptcy you file: Chapter 13 bankruptcies are more flexible and let you reorganize your debt, while Chapter 7 bankruptcies do not. If you file Chapter 13, you may be able to keep your home even when it has a bit of equity.
- How far behind you are on the mortgage payments: Your house is considered a secured debt, so bankruptcy won’t stop foreclosure forever. It can, however, allow you time to negotiate a new agreement with your bank to make up any missed payments and keep your home.
Money troubles often happen due to unexpected circumstances, and there’s no shame in this situation. You have to be proactive and look ahead.
If your debts are exceeding your income and you’re starting to have to make some hard choices about what to pay and what to let slide, it’s wise to talk to an experienced advocate about your bankruptcy options. The sooner you get the information you need, the less likely you’ll make a misstep moving forward.