Can I Keep My House if I File Chapter 7 in Florida?
If you are struggling with paying debts, you may be considering bankruptcy. Bankruptcy has a lot of advantages. It can wipe out debts and free up more of your money so you can start over.
There are two main types of bankruptcy for consumers: Chapter 7 and Chapter 13. In Chapter 7 bankruptcy, your assets are sold to pay off creditors. In Chapter 13 bankruptcy, you get to keep all your assets because you are in a repayment plan. You get three to five years to catch up on payments.
So, you may wonder: can I keep my home if I file for Chapter 7 bankruptcy? Surprisingly, the answer is yes. Even though assets are typically sold, you can keep your home in Florida.
Each state has different exemptions that protect certain types of property up to a certain dollar amount. Florida exemption laws protect equity in your residence up to an unlimited amount, which is rare. Only five other states have such broad laws: Texas, Iowa, Kansas, South Dakota, and Oklahoma.
What this means is that in Florida, no matter how much equity you have in your home, you are allowed to keep it if you file for Chapter 7 bankruptcy. This is good news if you want to keep your home and are current on payments.
However, if you are behind on payments and it is unlikely you will be able to catch up, then the lender can take action under the law. Chapter 7 bankruptcy will stop a foreclosure, but only temporarily. Eventually, the bank will foreclose, and the house will no longer be yours. You will not make any more payments, but you will have to move out.
- Most of your equity is protected with an exemption.
- You are current on your mortgage payments.
- You owe more on the house than it is worth.
- You can demonstrate that you are able to make mortgage payments on time.
What Can I Do if I am Behind on Payments?
If you are behind on mortgage payments, you can still keep your house, but you should file for Chapter 13 bankruptcy instead. Chapter 13 allows you to continue to make monthly mortgage payments as well as past-due payments. This means you can keep the mortgage alive, but it is not an easy task. Cases are often dismissed because the payment plans are not made in full.
When this happens, you are still responsible for paying your mortgage. Otherwise, you will lose your home.
Contact Our West Palm Beach Bankruptcy Lawyer Today
You may still be able to keep your home in bankruptcy. However, restrictions apply. If you are not current on your payments, your house could go into foreclosure.
West Palm Beach bankruptcy attorney Brian K. McMahon, P.A. can guide you through the process. We can ensure you complete all of the required paperwork and avoid making mistakes during the filing process. Fill out the online form or call (561) 658-1789 to schedule a consultation. We serve the West Palm Beach, Boca Raton, Port St. Lucie, and South Florida areas.