Dayton, Mansfield and Lima, Ohio Bankruptcy Attorneys
Does Filing Bankruptcy Mean I Will Lose My Home?
Bankruptcy is a way for debtors with an extreme amount of debt to get out of debt totally or be relieved from part of their debt. Bankruptcy is something that stays on a person’s credit file for at least ten years.
Many people fear losing their home if they file for bankruptcy. However, if there is no equity in the home, which is calculated by taking the value of the home today and subtracting the sale cost, payoff balance and liens, the trustee over the chapter 7 bankruptcy case “abandons” the home to the homeowner. Abandoning the home means the homeowner can stay in the home and keep the home on the condition the homeowner continues to make monthly payments on the mortgage. However, just because a person files for a bankruptcy does not mean that he or she is alleviated from the property of any tax liens, voluntary leans, mortgages or deeds of trust. The lender has the right to foreclose on the home and property if the mortgage payments are not made as agreed upon. As long as the payments are made on time as agreed, everything will be just fine. Generally, the lender doesn’t want to get any debtor’s property back. The business of the lender is to give loans, not take property. They make no money doing so. Lenders make their money when the payments for the mortgage are paid on time and stay current. When the debtor fails to keep up the payments, foreclosing on the home is a last option.
What does it mean when property is considered exempt? Exemptions include lists of the values and types of property that are legally outside the reach of creditors or the trustee of the bankruptcy. In all bankruptcies, the debtor has the right to select property from the list of exemptions that his or her state law provides. The debtor has the right to keep that selected property. Once the property is selected, the exempt property is taken completely out of the bankruptcy estate is not available to use for paying claims to creditors. The bankruptcy codes give debtors the chance to start fresh after they file for a bankruptcy while keeping the exempt property to help them with their new start. The federal and state statutes decide the exemptions allowed, and they can differ between states.
Federal law requires the following statement: We are a debt relief agency. We help people file for protection under the bankruptcy code.