Will I Lose My House During Chapter 13 Bankruptcy?

 Posted on September 20, 2023 in Foreclosure

Filing for Chapter 13 bankruptcy allows people to restructure their debt and regain control of their financial situation. One of the most common concerns people have when considering this type of bankruptcy is whether they will lose their home. When it comes to Chapter 13 bankruptcy, as long as you comply with the terms of your Chapter 13 repayment plan, your home will be protected from foreclosure. If you are interested in pursuing Chapter 13 bankruptcy in Texas, contact an experienced lawyer to ensure you have the legal guidance to make informed decisions regarding your financial future.

Automatic Stay and Repayment Plan

When you file for Chapter 13 bankruptcy, an automatic stay goes into effect, which halts all collection activities, including foreclosure proceedings. Because of this reason, you will not lose your house to foreclosure as long as you follow your proposed repayment plan. This repayment plan outlines how you intend to pay your debts. Generally, the repayment plan will detail how you will repay your debts over a three-to-five-year period. The plan will include provisions to catch up on any past-due mortgage payments while continuing to make ongoing mortgage payments. By adhering to the repayment plan, you can prevent foreclosure and keep your home. 

Equity Protection

If you have equity in your home, it is essential to understand how it will be treated during Chapter 13 bankruptcy. Equity refers to the value of your home minus any outstanding mortgage balances. In most cases, you can keep your home if you continue making mortgage payments and include any arrears in your repayment plan. However, the amount of equity you have may impact the amount you need to repay your creditors.

Appraisal and Valuation

During Chapter 13 bankruptcy, your home’s value will be assessed to determine its equity and the amount you need to repay to creditors. It is crucial to provide an accurate valuation of your property to ensure it is adequately protected. Consulting with a bankruptcy lawyer can help assess your home’s value accurately. 

Non-Exempt Property

Chapter 13 bankruptcy allows you to keep your home, but it is essential to understand that other non-exempt property could be subject to liquidation to repay creditors. Non-exempt assets typically include luxury items or purchases that exceed certain value thresholds. Working with a bankruptcy lawyer can help you understand which assets are exempt and which may be at risk during the bankruptcy process. 

Contact a New Braunfels Chapter 13 Bankruptcy Attorney

In serious legal situations such as this, you must ensure you protect yourself from the pitfalls of bankruptcy. Contact the experienced San Antonio Chapter 13 bankruptcy lawyer with Law Offices of Chance M. McGhee. Call 210-342-3400 for a free consultation.