Can I keep my house in bankruptcy? Another exciting installment of “Ask Doan Law Firm” (Part 2).

By admin • October 1st, 2010

Q:  Can I keep my house in bankruptcy?

A:  In the last post we analyzed this question in a Chapter 7.  Let’s look at a Chapter 13.

Just like a Chapter 7, in a Chapter 13 you receive an automatic stay on the date of filing.  That means no foreclosure can take place without court permission, i.e., the court grants a Motion for Relief from Stay.

Chapter 13 is a bit different because you are proposing a holistic financial plan for the next 3 – 5 years.  Your intention with the house will be a driving force in the plan.  Just like in a Chapter 7, you can surrender the house.  If you do, the resulting debt will put into the pot with your unsecured debt, credit cards, medical debt, etc., and will be addressed in your plan.

If you’d like to keep the house in a Chapter 13 plan, it needs to be part of the entire plan.  That means you need to be able to pay the payment, taxes, insurance and repairs going forward.  This often works because when the rest of your debt is worked into an affordable plan payment, the house may become affordable.

The Chapter 13 plan must address any missed payments.  These are priority claims and will be given special treatment.  You need to make sure you can make a plan payment large enough to catch up the house over the 3 – 5 years of your Chapter 13 plan.

As you might guess, keeping your home in a Chapter 13 is complicated to determine; you’re going to need assistance.  Doan Law Firm has a team of Chapter 13 professionals that do only Chapter 13 bankruptcies all day, every day.  They’re very knowledgeable, caring, and are ready to help you.

 

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