Are you a Georgia homeowner filing bankruptcy? If so, the question at the top of your mind is probably whether or not you can keep your house in a Georgia bankruptcy. Some Georgia debtors avoid filing bankruptcy because they don’t want to lose their homes. This avoidance often leads to even more severe debt issues and stress that could have been avoided. Don’t waste time making assumptions about what you can and can’t do during a Georgia bankruptcy. Just ask your Georgia bankruptcy attorney.
What Can Happen to a Person’s Home After Filing Georgia Bankruptcy?
Several factors come into play to determine whether a Georgia bankruptcy petitioner’s home is safe from seizure in bankruptcy. Researching your situation and consulting with an experienced consumer bankruptcy specialist is imperative before coming to a final decision about filing.
The Types of Bankruptcy:
There are two main types of consumer bankruptcy: Chapter 7 and Chapter 13 bankruptcy. If the primary goal in the bankruptcy is to save the home, Chapter 13 is the safest, but it’s not always necessary. Your home is not automatically taken from you when you file bankruptcy. It’s far more likely that a bankruptcy filer will keep their home regardless of whether they file Chapter 7 or Chapter 13 bankruptcy.
How are Debtors’ Homes Handled During Bankruptcy?
In a typical bankruptcy, when the filer is also a homeowner, the story begins with a struggle to pay overwhelming credit card bills or medical debt, while also maintaining on-time mortgage payments. Many who find themselves in this situation fall behind on their credit card or medical bills, but struggle to stay up to date with their monthly mortgage payments to avoid foreclosure. If the homeowner eventually decides to file bankruptcy and qualifies for Chapter 7, they keep their home in most scenarios. Chapter 7 bankruptcy concludes in a discharge of all dischargeable debt (including home loans). Still, interested homeowners can sign a reaffirmation agreement with their mortgage company, file it with the bankruptcy court, and maintain the mortgage as an official debt that the borrower resumes once the bankruptcy is closed. This series of events enables homeowners to take advantage of the fresh start of a Chapter 7 bankruptcy while maintaining their homeownership.
What If the Home Equity Exceeds the Georgia Homestead Exemption Amount?
The only problem with the “typical” scenario outlined above is if the homeowner/bankruptcy filer has a large amount of equity in their home. Most homeowners with mortgages don’t have enough equity to cause a problem, but the Georgia Homestead Exemption is capped at $21,500 of equity. Bankruptcy filers can also apply $5,000 of any unused portion of the Georgia homestead exemption towards other property.
What If the Bankruptcy Filer is Not Current On Their Mortgage?
When the homeowner is not current on their mortgage payments, they run the risk of foreclosure, whether it happens before, during, or after bankruptcy. But the average debtor will be able to file Chapter 7 bankruptcy and keep their home as long as their mortgage payments are not past due. Bankruptcy filers who want to keep their home, but are past due on their mortgage may need to depend on Chapter 13 bankruptcy instead of Chapter 7.
Filing Chapter 13 Bankruptcy to Save Your Home From Foreclosure:
Most people hoping to save their homes from foreclosure file Chapter 13 bankruptcy. The bankruptcy process of Chapter 13 is much more conducive to stopping foreclosure since it allows the bankruptcy petitioner to catch up on their mortgage payments during the bankruptcy process.
There is no shame in turning to bankruptcy to seek a discharge of debt when unintended circumstances leave you struggling to provide for your family. Are you out of choices? Do you need help releasing your family from the chains of debt? Do you need help to save your home from foreclosure? Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.