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Two important facts to know about filing Chapter 7 bankruptcy and protecting your home are:
- The bankruptcy laws in every state provide specific protections for homes
- The automatic stay instantly puts a stop to foreclosure
There is a misconception that filing Chapter 7 bankruptcy means you have to give up your home, car, beloved possessions and the things you have worked hard for. This simply isn’t the case.
The truth is, bankruptcy laws vary widely from state to state and from case to case. Every bankruptcy case is different.
For better understanding of how filing bankruptcy can protect your home, keep reading or speak with a local bankruptcy lawyer about the laws in your state.
If you’re ready to get started taking action to protect your home and get out of debt, complete the free case evaluation form on this page and we’ll connect you with a local Chapter 7 bankruptcy lawyer right away.
The Bankruptcy Automatic Stay Stops Foreclosure
The bankruptcy automatic stay is a powerful court order that kicks in as soon as you file any type of bankruptcy, including Chapter 7.
The automatic stay was created to put a stop to all forms of collection by creditors, including:
- Wage garnishment
- Phone calls and letters
The automatic stay will be in effect for the duration of your case. This ensures that your home or property won’t be yanked out from under you while you are getting your finances in order with bankruptcy.
Chapter 7 Exemptions Are Designed to Protect Your Home and Precious Property
Chapter 7 bankruptcy is, in some ways, a bargain. The US Courts agree to wipe out all of your unsecured debts – things like credit card and medical bills. In exchange, your creditors are entitled to proceeds from a sale of some of your valuable assets, like an expensive car, for example.
However, in almost every personal Chapter 7 bankruptcy case there is no sale of any property of any kind.
Thanks to Chapter 7 bankruptcy exemptions, most or all of your property may be fully protected from sale or repossession, including your home and cars.
Exemptions vary from state to state, but each state’s bankruptcy code includes them. In most states, exemptions are very detailed, outlining what and how much property is protected. The same is true of what’s known as “homestead exemptions.”
In some states, like Texas, your main home and property is fully exempt (unless your house covers 10 acres inside a city!).
Most states set a maximum value for your home. If your home is worth that amount or less, then it should be fully protected. In some states, the limit is hundreds of thousands of dollars.
If you own several homes, vacation properties or a particularly expensive home that you want to protect then filing Chapter 13 bankruptcy may be a better option, which includes more home protection but requires more income.
Protect Your Home With Chapter 7 Bankruptcy Exemptions
If you are suffering under the weight of massive credit card and medical debt, then Chapter 7 bankruptcy may help you clear it all and get a fresh start. Plus, you likely won’t have to sacrifice your home.
To fully understand how Chapter 7 works and how the laws in your state can help you, speak with a local Chapter 7 bankruptcy lawyer. Simply complete the free case review form on this page and we’ll connect you right away.