• Jovanna Bearden

If I file a bankruptcy will I lose my house?

Updated: Apr 3

This is a very common question, and for good reason. You need a home, and you don’t want to jeopardize it trying to get out from under your debt. But don’t let your fear of losing your home keep you from finding out about bankruptcy. There are ways to keep a house when you file a bankruptcy, and a skilled attorney can help you with these options.


What happens in a Chapter 7?

A Chapter 7 bankruptcy is a bankruptcy to wipe out your debts and give you a fresh start. But that doesn’t mean you’ll lose your home. To get a fresh start, there is a certain amount of property that you are allowed to keep, these are determined by your state’s exemption laws. In Missouri, you can have up to $15,000 of equity in a home. (Learn more about equity here) That means that as long as you have $15,000 of equity in your home, you can keep it in a Chapter 7 bankruptcy. If you have more equity than that, you can consider filing a Chapter 13 bankruptcy.


What happens in a Chapter 13?

A Chapter 13 bankruptcy is a reorganization of your debts, and a good option for anyone with equity in assets that isn’t protected by their state’s exemptions. Instead of turning your house over to be sold by the bankruptcy court, you can keep your house and set up a monthly payment plan to pay back some or all of your debt. The amount you pay back depends on the amount of equity that is unprotected, the amount and types of your debt, and your income. You want to work with a good attorney to see what kind of payment you will need to make and to understand what the payment plan covers.


Hopefully this information gives you a better understanding of how your home is treated in the different types of personal bankruptcy. Reach out to me today to get advice about your particular situation.

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