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Milwaukee, WI Bankruptcy Law Blog

Friday, April 6, 2018

Protecting Your Home in Bankruptcy

Will I lose my home if I file for bankruptcy?

One of the main concerns of many would be bankruptcy filers is losing their homes. Bankruptcy can be an effective financial tool for individuals who are burdened by debt. Through a Chapter 7 bankruptcy action, you can erase all or most of your unsecured debt. Chapter 13 bankruptcy, alternatively, allows you to restructure your debt. Your home can be affected by a bankruptcy filing, but with the help of an experienced Milwaukee bankruptcy lawyer, you can keep your home through bankruptcy.

Chapter 7 Bankruptcy and Your Home

Chapter 7 bankruptcy is known as the liquidation chapter.  When you file for a Chapter 7 bankruptcy, all of your property will go into the bankruptcy estate.  Fortunately, however, you will not lose all of this property. Federal and state law allows you to keep certain assets, including at times your home.

In Wisconsin, you are allowed to exempt $75,000 in equity in your home, or $150,000 for married couples filing jointly. Depending on the value of your home, you could potentially be able to keep your home free and clear even during a Chapter 7 bankruptcy. There are several other factors to consider, however, when determining how to protect your home in bankruptcy.  If you are behind on your mortgage, filing for bankruptcy will result in an automatic stay. This will not save your house in the long run though, as Chapter 7 does not eliminate your mortgage debt and will not include a way for you to catch up on payments.

Chapter 13 Bankruptcy and Your Home

For potential bankruptcy filers who are behind on their mortgage payments but want to keep their home, Chapter 13 bankruptcy is often the better option. Chapter 13 allows for you to catch up on any past due mortgage amounts by incorporating these and other debts into a three to five-year repayment plan. Upon completion of the repayment period, your mortgage will be up to date and you can continue to own your home.  

Before pursuing a Chapter 13 bankruptcy, it is important that you make sure you can afford to continue making mortgage payments on top of your repayment plan. Your bankruptcy lawyer will review your income and debts to help you determine which bankruptcy chapter will best serve you. If you are considering filing for bankruptcy, contact us today.



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933 North Mayfair Road, Suite 107, Milwaukee, WI 53226
| Phone: 414-436-8428