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Can I Keep My House In A Bankruptcy

Can I Keep my House in a Bankruptcy?

Many people’s biggest debt is the debt on their home.  Often times there is a reasonable mortgage payment, but other debts have caused someone to fall behind, or they are unable to pay other debts to keep up the mortgage.  A lot of people’s first questions in my office is “can I keep my home.” The answer to that is, like many other legal questions- it depends!

If there is a mortgage and/or a second mortgage or home equity line of credit and the payments are current, you may keep it and continue to pay for the home.  However, you want to think critically if this is a good idea for you.  If your home is severely underwater, or your mortgage payment is unaffordable even after bankruptcy, it may not be a good idea to keep the home. 

One advantage of a Chapter 13 bankruptcy is that it may allow you to keep your home and catch up your payments over time.  There is even an option, if your situation qualifies, where you may be able to “strip” the second mortgage and discharge it.  This is possible if, among other things, your first mortgage is higher than the value of your home. 

So, in most cases you can keep your home, but you will want to talk to a Michigan bankruptcy attorney who can help advise you 

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