Do I Have to Lose my Home?

Filing for bankruptcy often comes with a lot of unwanted baggage, such as stress, doubt, worry, and fear. Will I lose everything? Can I recover?

One of the most common fears is that people will lose their home, and rightly so. Homes are more than just a place to live, they provide safety and security, which are both necessary for good mental and physical health.

Thankfully, bankruptcy law allows for a sixty thousand dollar home exemption. Doesn’t sound like much, does it? Most homes can be anywhere from eighty thousand to three hundred thousand dollars, which makes sixty thousand seem pretty inadequate.

The exemption isn’t for home value, though, it’s for your home equity. For example, if you own a house that’s worth one hundred and fifty thousand dollars and still owe ninety thousand dollars for your mortgage, that means that you have sixty thousand dollars in equity in the home. Your equity is the amount that you’ve already paid. It’s your ownership stake.

Most people filing for bankruptcy don’t have anywhere near sixty thousand dollars’ worth of equity in their homes, and especially considering how home prices and interest rates have fallen in the last few years, the likelihood that you’ll be able to keep your home is pretty good!

Rather than leaving it up to chance, though, it’s a good idea to make an appointment to consult with a bankruptcy attorney who can go over your finances and tell you for sure whether you can keep your home. It’s worth the peace of mind!