Filing for bankruptcy protection is something many Iowa residents do when they need to dig themselves out of debt or get a fresh financial start. If you count yourself among those considering doing so, you may be wondering how filing will affect other aspects of your life, and whether you will have to surrender your home at some point during bankruptcy proceedings.
According to the Washington Post, filing for bankruptcy does not automatically mean you are going to have to say goodbye to your house, condo or what have you. Instead, whether you will have to give up your home depends on several circumstances, such as the type of bankruptcy case you file. Most people facing situations similar to yours end up filing either a Chapter 7 or a Chapter 13 bankruptcy. Chapter 7 bankruptcies are typically for lower-income earners, while a Chapter 13 bankruptcy helps people who have the ability to pay back at least part of their debts restructure them to make them more manageable.
If you pursue Chapter 7 bankruptcy protection, whether you will lose your home will be contingent on how much equity you have in it, and whether the amount of equity you have falls below the state of Iowa’s set exemption amount. If you file for a Chapter 13 bankruptcy, you can typically keep your home when you file for bankruptcy, as long as you keep up with all payments outlined in your restructuring deal. While filing for bankruptcy can have far-reaching impacts, it can also help you find financial relief when you have failed to do so through other methods.
This copy is informative in nature and is not a substitute for legal advice.