Have you heard this bankruptcy myth? You can't file bankruptcy if you are a home owner. This is usually followed by another one: If you file bankruptcy, you will lose your home. If you have heard these, then you've come to the right place.
Homeowners file bankruptcy all the time and are able to get a fresh start in life!
Ignore the Bankruptcy Myth!
Owning your home does not prevent a New Jersey resident from filing either a chapter 7 or a chapter 13 bankruptcy. So put that myth right out of your head and don't let it keep you from considering bankruptcy as an option.
The real question you need to ask is whether filing a chapter 7 bankruptcy could result in your losing your home to sale by the trustee. The answer to that, for the vast majority of South Jersey residents, is NO. Here's why.
The Odds of a Bankruptcy Trustee Sale Are Slim
In the vast majority of cases (my personal, unscientific estimate is 95 out of 100) the bankruptcy trustee does not sell the debtors' home. There are three reasons why I say this:
- Many people these days owe more than their home is worth. If this is the case with you, then the trustee won't sell your home because the only creditor that would get paid would be the mortgage company.
- Even if you have some equity in your home, it may not be enough for the trustee to be interested in selling it. This is because you get to keep a certain amount of the equity in a bankruptcy sale due to exemptions. If the equity in your home doesn't exceed this exemption, then the trustee won't be interested in selling your home because the only ones that would then get paid would be the mortgage company and you.
- Even if there is some unexempt equity, the trustee may not be interested because the potential payout to creditors may not be enough to make selling the home worth the effort.
The bottom line here is that you should not automatically assume that you would lose your home if you filed a chapter 7 bankruptcy. You should talk to a bankruptcy attorney to see what the risk is to you.
So What Should I Do?
One of the biggest issues in a chapter 7 bankruptcy is the risk to your home. This is not something that you want to get wrong! You need an experienced bankruptcy attorney on your side.
So, if you live in Burlington, Camden, Gloucester, Salem or Cumberland County, are considering filing bankruptcy, and are ready to take action, call my office at 856-432-4113 or contact me through this site for a free consultation to discuss your case. I would be happy to go over the numbers with you to see if the sale of your home might be a risk.
If you are looking for more information about bankruptcy, then download my free book, Top Questions People Ask About Filing Bankruptcy in New Jersey.
Not sure if bankruptcy is right for you? Take the quiz to the right to find out more!
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