Many people who are considering filing for bankruptcy are afraid of losing any of their assets, but there is perhaps no greater fear than the fear of losing your house. If you have owned your home for a significant amount of time, it may be a greater emotional fear than losing other assets, as the memories you create in your home are intertwined with the property itself.
Fortunately, this fear can be assuaged in most cases. Individuals filing bankruptcy in Minnesota can protecting certain assets by utilizing either federal or state system of exemptions.
Both the federal and state exemption systems offer protections for equity in a homestead. Minnesota lists homestead real estate among its bankruptcy exemptions, up to $390,000 in equity. The federal exemptions are smaller. The exact amount of protection available will depend on the number of individuals filing bankruptcy and how the home is titled.
While your circumstances may vary, there are many things a bankruptcy can do to help you with your home. Talk to a qualified bankruptcy attorney about your concern and find out if bankruptcy is right for you.
Individuals who are worried about their home equity being covered should not worry. There are often options for those who own a home whose equity exceeds the exemption limit. A bankruptcy attorney can advise you of your options in these circumstances. Most individuals who file for Chapter 7 or Chapter 13 bankruptcy are able to find a way to keep their property.
Is Chapter 7 or Chapter 13 bankruptcy better for me?
If your main concern is keeping your home after filing for bankruptcy, either Chapter 7 or Chapter 13 bankruptcy could be the right option. It depends on which plan is right for you and your post-filing future.
Filing Chapter 7 bankruptcy is ideal for individuals who have not fallen behind on mortgage payments or who do not wish to keep their home.. Chapter 7 allows you to discharge most of your unsecured debt and establish a budget to only pay for monthly living expenses, which includes mortgage payments.
Filing for Chapter 13 bankruptcy can allow you to reorganize your finances in the form of a debt repayment plan, usually between three to five years. If you are delinquent on mortgage payments, the reorganization plan can enable you to repay them.
Make sure you talk to a bankruptcy attorney who can advise you of the right bankruptcy for your individual circumstance.
No matter which route you choose, the fear of losing your home is likely greater than the likelihood you will lose your home. Individuals considering filing for bankruptcy should not be deterred if they are worried about their home being seized, as there are options available to keep this from happening.