Your Property & Bankruptcy

Posted by Bruce White | Oct 20, 2016 | 0 Comments

One of the most important questions in the bankruptcy process is, what happens to my property during bankruptcy? Most of the time, property is protected in bankruptcy. However, if a borrower has substantial assets which are not covered under bankruptcy exemptions, then they need to sell their property to make up the debt. No matter where a debtor resides, there are specific exemptions offered by either the state or under federal bankruptcy statues that are made to protect homeowners.

Your Mortgage and Chapter 7 Bankruptcy

Homeowners who qualify for Chapter 7 bankruptcy may be eligible for exemption on their home from possible liquidation. This is beneficial for those who are behind on their mortgage payments because the court would allow homeowners to pay back mortgage arrears over as many as five years, given they can still make the monthly payments. However, if a homeowner has significant equity, there are homestead exemptions that allow them to exempt certain amounts. Under the Virginia exemption system, homeowners may exempt up to $5,000 of their home or other property covered by the homestead exemption. If you are married, you can exempt up to $10,000 of home equity.

Your Home and Chapter 13 Bankruptcy

Under Chapter 13, borrowers are able to keep their homes, but they must remain current on their mortgage payments. It's important to understand that Chapter 13 is a reorganization of debt. However, if you have significant equity in your home, your creditors could be receiving a higher payoff over the term of your Chapter 13 repayment plan unless that equity can be exempted.

What are Your Mortgage Options?

Prior to filing for bankruptcy, it is imperative to make a decision whether or not you want to stay in your home. A high monthly mortgage payment could lead to you falling behind on your payments again, which could result in foreclosure. You may also face a deficiency judgment if your lender sells your home for less than what you owe, so you should negotiate with the lender prior to filing for bankruptcy.

If you need experienced and skilled legal assistance when it comes to declaring bankruptcy in Richmond, Virginia, contact Bruce W. White, P.C. today.

About the Author

Bruce White

Aggressive Bankruptcy Attorney in Richmond Bruce W. White has been helping clients with solutions to their financial problems for over 30 years. He is experienced, skilled, and knowledgeable, and can handle your case from start to finish with the dignity and respect it deserves.


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