What happens to your home equity when you file bankruptcy?

Homeowners who file for bankruptcy often find that the trustee will search for any assets belonging to the debtor and when filing a Chapter 13 bankruptcy, the equity in the home will need to be listed.

What happens to your home if you file bankruptcy?

Home equity is considered an asset in your bankruptcy. If you file for Chapter 7 bankruptcy, the bankruptcy trustee has the power to sell your nonexempt assets (including your home) to pay back your creditors.

What is the bankrupt’s share of the equity in?

Pre bankruptcy you can determine the actual figure representing your share of the equity in the house and home. Where a property is jointly owned this half interest in the equity in the home is likely to be your maximum exposure to the bankruptcy trustee.

What happens to your half interest in your home if you file bankruptcy?

You then divide that sum by 2 to show your half interest in the equity in the home. In the event of your bankruptcy, it may be possible that your wife could buy out your half interest in the home before the bankruptcy order is made.

Homeowners who file for bankruptcy often find that the trustee will search for any assets belonging to the debtor and when filing a Chapter 13 bankruptcy, the equity in the home will need to be listed.

Home equity is considered an asset in your bankruptcy. If you file for Chapter 7 bankruptcy, the bankruptcy trustee has the power to sell your nonexempt assets (including your home) to pay back your creditors.

Can you sell your home in a Chapter 7 bankruptcy?

In Chapter 7 bankruptcy, the bankruptcy trustee appointed to administer your case has the power to sell your home if you can’t exempt all of your equity. But in Chapter 13 bankruptcy, you can keep your home in exchange for paying back a portion of your other debts (discussed below).

Can a home be exempt from Chapter 13 bankruptcy?

If you can exempt all of the equity in your home, it will not affect your Chapter 13 bankruptcy. If you have any nonexempt equity, you can still keep your home in Chapter 13 bankruptcy.