Will I Lose My House If I File Chapter 11 – When you are under financial stress, your whole life can feel uncertain. Financial difficulties can cause stress and anxiety which can be made worse if you are not sure how your financial problems will affect what is important to you.
When you are under financial stress, your whole life can feel uncertain. Financial difficulties can cause stress and anxiety, which can be made worse if you are not sure how your financial problems will affect what is important to you, such as your home.
Will I Lose My House If I File Chapter 11
If you’re thinking about filing for bankruptcy and have questions about how bankruptcy will affect your home, here’s what you need.
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Yes. However, you must first be considered insolvent to be eligible to file for bankruptcy. Being insolvent simply means that you owe more than you owe, or that you cannot continue to pay your debts. During your first meeting with a licensed insolvency practitioner (LIT), he or she will review all areas of your finances, such as your debt, total income and assets (including your home). If you are insolvent, your ITL will explain two legal options for debt relief, consumer proposals, bankruptcy and how each solution will affect your financial situation.
The amount of equity you have in your home will play an important role in determining whether you can keep your home when you file for bankruptcy. To determine the equity in your home, you need to know the current market value of your home, the amount of your mortgage and how much you owe in property taxes. The calculation looks like this:
Your equity = market value of your home – amount of your mortgage – unpaid property taxes
Let’s look at an example. Using the above calculation, if the market value of your home is $350,000, your outstanding mortgage is $310,000, and you owe $2,500 in property taxes, your equity is $37,500 (or $350,000).
Will I Lose My House If I File Bankruptcy?
If you have little equity in your home, and your outstanding debt is much more than you would pay with your equity, you may be able to keep your home if you can keep making payments to your lender mortgage. To keep your home in bankruptcy, you must pay ITL the amount you own in your home, less any provincial exemptions. There are exceptions that allow you to keep some of the equity in your home when you file for bankruptcy. Because each province has its own list of assets that are exempt or protected during bankruptcy, it’s best to talk to ITL about your situation.
The amount of equity you have in your home is the amount of money you can get if you sell. This is money you would need to repay your debt. In a bankruptcy proceeding, if you have a large amount of equity in your home and you cannot afford to pay off the non-exempt equity with your ITL, you may have to give up your home. In this case, if you want to proceed with bankruptcy, your ITL will arrange to sell your home and the money will be given to your creditors.
Because filing for bankruptcy eliminates most of your unsecured debt (such as credit cards, payday loans and lines of credit), it may be easier for you to meet financial obligations related to your mortgage, property taxes and utilities. . During the bankruptcy process, you will attend two credit counseling sessions, where your ITL will discuss strategies for budgeting, credit and debt management, and rebuilding your credit during and after your bankruptcy.
During your first meeting, ITL will explore several debt relief options to find the right solution for your unique circumstances. Bankruptcy is only considered when all other debt solutions have been ruled out. A consumer proposal is a formal debt relief option that allows you to keep your assets, including your home, and can significantly reduce the amount of unsecured debt you have. To learn more about consumer recommendations, see our blog post, 10 Things You Need to Know About Consumer Recommendations.
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The thought of filing for bankruptcy can be overwhelming and scary, but everyone’s situation is unique. If you are behind on your debt payments and fear losing your home, a licensed bankruptcy trustee can help you decide if bankruptcy is the right solution for your situation.
If you are concerned about how bankruptcy will affect your home, meet with a licensed bankruptcy trustee today to find out what debt relief options and exemptions are available to you.
Life Events and Debt April 1, 2021 Home Ownership and Mortgage Debt: Finding Relief in a Consumer Proposal Read MoreHome » If I File Chapter 7 Bankruptcy in Pennsylvania, Can I Keep My Home, Car, or Other Personal Items?
If I file for Chapter 7 bankruptcy in Pennsylvania, can I keep my home, car, or other personal items?
Can I Keep My Home If I File Chapter 7 Bankruptcy In Pennsylvania?
Unfortunately, there is a widespread myth that filing Chapter 7 bankruptcy in Pennsylvania will result in the loss of your home, car, and other personal property. This harmful myth has probably put thousands of people off applying – but in most cases it’s not true. Conversely, most people who file Chapter 7 can
All or most of their holdings. In fact, Pennsylvania’s bankruptcy laws allow filers to choose between two sets of bankruptcy “exceptions” that prevent certain assets from being sold during the process. In this article, Chapter 7 bankruptcy attorneys Young, Marr, Mallis & Associates will separate fact from fiction by explaining when and how you can keep your property after filing bankruptcy in Philadelphia.
“If you file Chapter 7 bankruptcy in Pennsylvania, you will lose your home, your car, and all of your personal property.”
If you answered “fact”, you may be in for a pleasant surprise. Debtors who file for Chapter 7 often keep most of their property, including valuable assets such as jewelry, personal vehicles, and even real estate.
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Each debtor’s situation is unique and the ability to retain property varies from case to case. It depends on factors such as how much debt you have and how much the property is worth. When it comes to real estate, one critical question will play a big role in determining whether you can keep your home: how much equity do you have in your home?
To find out, start with the fair market value of your home, then subtract the amount you still owe on your mortgage. For example, if the fair market value of the home was $200,000, but you still owed $150,000, you would have $50,000 in equity. Depending on the number you reach, there are two possible outcomes.
There is equity. It may seem counter-intuitive, but that could be good news. If you have no equity in your home, the trustee – in other words, the person appointed to liquidate your assets – will not sell the property, as it will not provide payments to your creditors.
Pennsylvania allows debtors to choose between two sets of bankruptcy exemptions: federal bankruptcy exemptions and Pennsylvania bankruptcy exemptions. Since the Pennsylvania exemption does not include a homestead exemption—in other words, the exemption that some debtors use to protect their homes—it may make more sense than federal exemptions. However, there are sometimes exceptions, especially for married couples, which is one of the reasons why it is so important for debtors to consult with experienced Berks County bankruptcy attorneys.
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The federal homestead exemption covers up to $23,675 in equity, although this figure can be increased with a “wild card” exemption, or possibly even doubled. Duplication may occur if:
If exemptions are not enough to cover 100% of your equity, the trustee can sell your home. However, you will be allowed to keep what you sold.
Outside of big cities like Philadelphia, most Pennsylvanians rely on their cars (or other vehicles) to commute, go to school, run errands, and transport family members. For all these reasons, losing your car can be catastrophic – especially if you don’t have access to reliable public transport.
Fortunately, you may be able to keep your car if you file for Chapter 7 bankruptcy. It depends on how much your vehicle is worth, whether you are current on your car loan payments, and whether you decide to use state or federal bankruptcy exemptions.
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If you owe unpaid car loan payments, you usually won’t be able to keep the vehicle, even with bankruptcy exemptions.
You can come up before filing. If you are behind on your car loan payments, there are two basic strategies to stay current and prevent the sale of your vehicle:
Keeping track of your payments will make it easier to protect your vehicle. The federal motor vehicle exemption allows you to cover up to $3,775 in car equity. In stark contrast, Pennsylvania does not have a motor vehicle exemption. However, debtors who choose to use Pennsylvania’s exemptions can protect up to $300 in vehicle equity by using Pennsylvania’s wildcat exemption.
The answer to this question depends on whether you choose the Pennsylvania bankruptcy exemption or the federal bankruptcy exemption. It is important that
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