For many individuals who consider filing bankruptcy, there is a concern that they will lose their property – particularly their home. While other assets can be replenished over time, a house typically comes with emotional attachments that are irreplaceable and difficult to lose.
While Chapter 13 bankruptcy can be a helpful option for individuals seeking to avoid foreclosure, you may be wondering what options Chapter 7 can afford. Can you keep your house and file Chapter 7 bankruptcy?
In Chapter 7 bankruptcy, individuals could end up losing non-exempt property. What property is considered exempt under Mississippi bankruptcy exemptions? For homesteads, it is property occupied by the debtor up to $75,000 and not exceeding 160 acres. The exception to this limit is if the debtor is over 60 and either married or widowed.
The exemption limit is measured by the equity of the home, which is the difference between the value of the property and what is owed on the property. For instance, a home valued at $300,000 with a loan of $250,000 has an equity value of $50,000.
So, for homeowners who are not facing foreclosure yet and who have equity in their home that is within the exemption limit, Chapter 7 may, depending on the circumstances, be beneficial.
If a homeowner is currently facing foreclosure on their home, the automatic stay created by filing under Chapter 7 may only serve as a temporary defense. So, sometimes, Chapter 7 may not be the best option for homeowners already facing foreclosure.
If you are considering filing bankruptcy and are most concerned with keeping your home, Chapter 7 could be the right option for you or Chapter 13 may be best, depending on your particular circumstances. You may find it best to discuss those options and how each type of bankruptcy might be able to assist you with an experienced bankruptcy attorney. Such professionals can point individuals facing debt problems towards solutions that may allow them to keep the assets that matter most to them while providing a needed fresh start.