Will I lose my home in bankruptcy?
Once Miami, Florida, residents are at the point of considering filing for personal bankruptcy they are often already facing the prospect of losing their home to unmanageable debt. If you are a homeowner who is currently weighing your debt relief options, it can be helpful to know what may happen to your house in bankruptcy proceedings.
In order to understand how real estate property is addressed through personal bankruptcy, it’s important to recognize how Chapter 7 and Chapter 13 bankruptcy differ. The Nest explains that filing for Chapter 13 bankruptcy does not involve the liquidation of assets in order to pay creditors. As a result, the equity of your home would not be a factor in your case if you were to file under Chapter 13.
In Chapter 7 bankruptcy, however, personal assets are liquidated in order to repay creditors, while discharging any and all eligible personal debts. As a result, real estate equity is a factor that is taken into consideration in many Chapter 7 bankruptcies across the country. Still, a homestead exemption does exist in the state of Florida, allowing many families to keep their homes after filing for Chapter 7. It’s important to note, though, that the homestead exemption does not apply in all cases. If you are not a permanent resident of the state of Florida, for instance, your real estate property may not be protected under the state’s homestead exemption.
Florida state and federal bankruptcy guidelines can be complex. It’s important to remember that the information provided above may not be relevant to your case and should not, therefore, be considered legal advice.