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Can I keep my home even if I file for bankruptcy?

If you are struggling with overwhelming debt and are unable to pay your mortgage, you may be concerned that you could lose your home. Banks are usually quite swift in foreclosing on homeowners who miss their mortgage payments, and depending on how many payments you have missed, you may be at a high risk of foreclosure in the near future.

The risk of foreclosure can bring a lot of anxiety, and you could be contemplating bankruptcy as an option to help you get out from under your debt. A big question that many homeowners contemplating bankruptcy ask is whether they can actually save their homes and file for bankruptcy as well. The answer to this question depends on a variety of factors, including the specific type of bankruptcy you file for.

Two types of bankruptcy

If you are considering filing for bankruptcy, one of the most basic concepts you will first need to understand is that there is not just one type of bankruptcy. There are two types of personal bankruptcy that you can choose from when assessing your situation: Chapter 7 and Chapter 13.

Liquidation versus reorganization 

Chapter 7 is a liquidation bankruptcy because you can permanently discharge certain debts. Whether you choose a Chapter 7 filing depends on the specific nature of your debt. Unsecured debt is generally what gets discharged in a Chapter 7 filing. 

Chapter 13, on the other hand, is a debtor's reorganization bankruptcy filing. This means that if you file for Chapter 13 bankruptcy, you can keep your property. However, in this type of bankruptcy, rather than discharging your debts, you will reorganize your debt to repay it in a way that suits your needs. Not everyone can qualify for this type of bankruptcy, but if you are concerned about wanting to keep your home, this is the option that you should inquire about first. A repayment plan can help you pay arrears and stay current on your mortgage payments so that the lender cannot foreclose.

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Cunningham, Chernicoff & Warshawsky, P.C.
2320 North 2nd Street
Harrisburg, PA 17110

Toll Free: 866-534-4404
Phone: 717-260-3527
Fax: 717-238-4809
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Harrisburg, PA 17106

Toll Free: 866-534-4404
Phone: 717-260-3527