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Friday, February 15, 2013


Many of my bankruptcy clients are understandably concerned that they will lose their house in their bankruptcy.  However, this is often not the case.  Whether a person filing chapter 7 bankruptcy will lose their home depends on several factors.  First, are the payments current on the home?  One of the reasons people often file for bankruptcy is because they are behind on their mortgage payments and they are trying to avoid a foreclosure.  While it’s true that filing a chapter 7 bankruptcy will stop a foreclosure temporarily, if the payments are not made current, it is likely that the lender will simply petition the court for permission to foreclose on the home.  In this situation, a chapter 7 bankruptcy will merely serve to delay the bankruptcy. 

Conversely, if the mortgage payments are current (or close to current), then the bankruptcy filer may be able to keep their home.  In Georgia, a chapter 7 filer has a variety of exemptions available to him.  These exemptions are used to determine what property the filer can keep and what property must be handed over to the bankruptcy trustee for the benefit of the creditors.  Georgia allows a $21,500 exemption for equity in real estate that the filer uses as a residence.  A married couple filing jointly will have a $43,000 exemption available to them.  Consequently, if you own and live in your home, are married and filing bankruptcy jointly, are current on your mortgage payments, and have less than $43,000 of equity in your home, you will be able to keep your home so long as you continue to make the mortgage payments as they become due.

If you have additional questions about bankruptcy, please call Brim Law, LLC at (678) 353-3350 for a free consultation.