One of the first questions homeowners ask when considering bankruptcy is if they can keep their house. The answer to this question is of course it depends.
First, we want you to know that often people get to keep their house through bankruptcy. Second, for some people bankruptcy is actually the thing that gives them the ability to save their house! We’ll explain in detail below.
Every homeowner’s specific situation is unique, as is every bankruptcy case. As bankruptcy attorneys, we must first look at the entire financial picture before determining what the options are. To ensure we can give you an in-depth understanding of how bankruptcy with affect you and your home, we offer free consultations.
Questions to Ask Yourself
If you are a homeowner considering bankruptcy you must ask yourself: do I want to keep the home?
If you want to keep the home, then you must ask yourself: can I afford to keep the home? Be honest with yourself. Can you reasonably afford the monthly mortgage payments? Can you afford the property taxes, HOA fees, and other costs that come with home ownership?
If you want to keep the home and you can reasonably afford to do so, then we must explore if your home can be protected through bankruptcy.
Protecting Your Home Through Bankruptcy: Georgia Homestead Exemption
Bankruptcy law provides for you to keep property, assets, and other belongings valued up to a certain dollar amount through exemptions. Property that is protected in bankruptcy is known as exempt property. You get to keep exempt property if its value does not exceed a certain dollar amount.
The Georgia homestead exemption allows you to protect up to $21,500 of equity in real estate. If the title to the property is held by one of two spouses, you may exempt up to $43,000 of equity in real estate.
Home equity is determined by subtracting the amount owed on the house from the current fair market value of the property. For example, if your house is currently valued at $250,000 and you owe $235,000 on it, your house has $15,000 of equity. In this case, Georgia’s homestead exemption would protect the house through bankruptcy.
As long as you do not have too much equity in your home, you will be able to protect it through bankruptcy.
Click here to view a full list of Georgia exemptions. And read our article What Property & Belongings Are Protected in Bankruptcy?
Chapter 13 Benefits to Homeowners
Anyone who decides to file for personal bankruptcy will decide between filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy. Of course, we help all of our clients determine which chapter is best for them. For a quick overview of the differences between the two chapters, click here.
Filing for either chapter will immediately stop a pending foreclosure sale. In fact, filing for bankruptcy immediately stops all collection action. However, Chapter 13 offers benefits to homeowners that Chapter 7 does not.
- Chapter 13 creates an opportunity for homeowners to catch up on mortgage arrears. Read our article Catch Up on Missed Mortgage Payments with Chapter 13 Bankruptcy.
- Chapter 13 creates an opportunity to eliminate a second mortgage on an underwater home. Read our article Underwater Homes Eligible For Second Mortgage Lien Strip in Chapter 13 Bankruptcy.
We help hundreds of homeowners just like you keep their homes through bankruptcy each year. But our clients are never just a number. You will not be left in the hands of a paralegal. You will have access to your attorney throughout your bankruptcy case. Call us today at (912) 351-9000 or contact us via the web to schedule a free consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.