Will I Lose My House if I File Bankruptcy?

This is a common concern for many people who are contemplating whether or not they should file bankruptcy.  The vast majority of people who own a home have one or two and sometimes three mortgages secured by their home.  Because of these mortgages, there is generally little equity or value beyond the amount owed on the mortgage(s).

Chapter 13 bankruptcy is available to most people who have a steady stream of income.  One of the goals of Chapter 13 is to allow people to keep their property while they pay some money back on the debts they owe.  So no you will not lose your house if you  file Ch 13 as long as you have sufficient income to meet your basic living expenses and can still afford to make the mortgage payments.

If Chapter 7 bankruptcy is the option you prefer, you will generally not lose your house as long as you are current on the payments, and your income is enough to allow you to continue making the mortgage payments and cover your basic living expenses.  In Ohio you also have exemptions of approximately $20,000.00 (single) and $40.000.00 (married) that allow you to claim as exempt against any equity you have in your residence.  So unless your house is will sell for an amount far exceeding the amount you owe on it, and you can continue to make the mortgage payments, you should not lose you house if you file Ch 7 bankruptcy.

But what about the Trustee, can’t he/she take my house anyway?  The trustee works for your creditors.  The Chapter 7 trustee’s job is to find assets he/she can turn into cash to pay to your creditors.  In order for the trustee to benefit from taking your house he has to be able to sell it for a profit after he pays the mortgage(s), taxes, and you for your exemption amount.  Typically you will not lose your house because the trustee will not profit from selling your house.

Please contact me at 740-369-6812 to discuss your situation and answer any further questions.

Can I Keep My Car if I File Bankruptcy?

Generally speaking the answer is “Yes you can keep your car if you file bankruptcy.”  With a few exceptions that will be discussed later, you can keep your car if you file bankruptcy provided you have the means to continue making payments and pay for your basic living expenses.  Most people still have a loan against their car that is close to the amount the car is worth.  In Ohio, you have an exemption in the amount of up to $3,450.00 for one car.  What does this mean?  If you own a car free of any loans or your car is worth more than you owe on it, you can claim as exempt from the trustee an amount up to $3,450.00.  Keep in mind that the trustee represents your creditors and is trying to find assets that he can sell and turn into cash to pay your creditors.  The trustee has to decide if he can take your car and sell it for a profit above and beyond the amount you owe on it if you have a loan plus your exemption of $3,450.00.  The trustee will also incur expenses trying to sell your car that he has to take into consideration, such as appraisal fees, storage fees, and auction fees.  So generally speaking, most people who file bankruptcy get to keep their car.

There are a few exceptions.  If you cannot afford to continue making payments on the car, then your car loan company will be the one who tries to take your car because you cannot afford it.  If you own your car free and clear of any loans and it is worth a significant amount more than your exemption of $3,450.00, then chances are good the trustee would be interested in taking your car and selling it.  You still get your exemption amount of $3,450.00.  If you have more than one car per debtor titled in your name, and they are worth more than the loans, the trustee may pursue the car you cannot apply your exemption too.  The scenarios are many and the best solution is to call an attorney to discuss your individual situation to find out if you will be able to keep your car if you file bankruptcy.