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Can You Keep Your Home in a Bankruptcy?

The possibility of losing the family home is a concern that sometimes prevents people from considering bankruptcy as a means of debt relief. There is a lot of misinformation out there leading people to believe that they will have to give up their home in every case. The truth is, some people are able to keep their homes, and others are not. You should seek out a skilled lawyer with whom to discuss your specific situation.

The Law Offices of Anca Iacob is a law firm dedicated to helping people through serious financial trouble. One of our strengths is our open, honest communication with clients. When you come to us, we will give you an opinion about whether staying in your home is possible. If it is possible, it may still be smarter to downsize. This is the kind of information that is never easy to hear, but part of our job is to set you up for success in the future. We encourage you not to draw any conclusions until we have discussed your situation in depth.

How Is the Family Home Handled in Bankruptcy?

The likelihood of staying in your home depends in part on the type of bankruptcy you file. However, one immediate benefit, whichever type you file, is that home foreclosure proceedings will stop. This will buy you some time to figure out what to do next.

Chapter 13 bankruptcy: Chapter 13 involves a reorganization of your debt, usually without the need to forfeit property. As long as you continue to make your payments under the court-approved payment plan, there is a good chance that you can keep the home.

Chapter 7 bankruptcy: In Chapter 7, all property is sold to satisfy debts unless that property is exempt. In Arizona, the good news is that there are a variety of exemptions that may apply to you. The point of Chapter 7 is to give you a fresh start, not to leave you penniless. Arizona allows a filer to exempt $150,000 of equity in the family home. In plain English, this means a person who files Chapter 7 will get to keep a primary residence with up to $150,000 in equity. Any equity beyond this is considered part of the bankruptcy estate, which means the house could be subject to foreclosure and any proceeds in excess of $150,000 will be used to pay creditors.

Lien Stripping a Second Mortgage in Chapter 13 Bankruptcy

In situations where your home's value is less than what you owe in mortgages, Chapter 13 bankruptcy provides the option of stripping a second "underwater" mortgage. This does not necessarily mean that you don't have to pay the lenders back, but it does give their claim a lesser priority among other creditors.

Not Black and White

Like so many things in bankruptcy, there is no way to get a definitive answer until an attorney has a chance to analyze your specific situation. When you visit us, you will speak with Phoenix bankruptcy lawyer Anca Iacob, who can help you understand your options. We will determine what property is exempt and what isn't. We understand that your home is more than a building. There are strong emotions involved. Rely on us to give you the advice you need as you decide whether to keep or sell your home.

Contact a Glendale Home Foreclosure Attorney for an Initial Consultation

Do not believe everything you hear. It may be possible to keep your home in bankruptcy. Please call 623-266-0060 to schedule an appointment, or you can contact our Glendale law office online. Consultations are available from 9 a.m. to 5 p.m. Monday through Friday. Evening and weekend meetings can be arranged by appointment.

Our office is located near Highway 101 and offers free and easy parking.

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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Office Location

Law Offices of Anca D. Iacob
P.O. Box 11531, Glendale, AZ 85318-1531
Tel: 623-266-0060 | Fax: 623-334-6869

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