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Bankruptcy May Be Your Option

Will I lose my home during bankruptcy?

When Oklahoma residents find themselves surrounded by insurmountable unpaid bills, they may decide to file for bankruptcy. While doing so may be a fresh financial start, you may worry about what happens to your house during the process. A short answer to whether you will lose your home during bankruptcy: Maybe.

There is not cut-and-dried answer to this question. It all depends on the surrounding circumstances, and what form of bankruptcy you are filing for. If you file for chapter 7 bankruptcy, you are entitled to certain exemptions that chapter 13 is not. But, they are much more stringent. If home does not have enough equity to cover your debt via liquidation, you may be able to keep it. However, a chapter 13 bankruptcy is a reorganization of your debt, so your lender may be more willing to work with you, allowing you to keep the home. 

Even if you are allowed to keep the home after either chapter 7 or chapter 13 bankruptcy, you are not in the clear. Your lender will expect you to keep paying your mortgage, either in full or on a modified plan from chapter 13. This is also good news for chapter 7 filers. If you managed to keep the house, your other debts have likely been forgiven. This means you have more money to put toward the mortgage. Plus, paying the mortgage can help you recover your credit score after the bankruptcy.

Whichever way you go with bankruptcy, your home could be in jeopardy. As such, it may be beneficial to speak with an experienced attorney, who may be able to help you fight to keep your house.  

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