Here’s how you can keep your home and get financial freedom with bankruptcy.
According to Statista, in June of 2021, Alabama had the highest bankruptcy filing rate in the United States with 306.37 residents per 100,000 filing for bankruptcy.
Often, bankruptcy tends to have a negative connotation that causes it to be viewed as a sign of defeat or failure, but it can be an effective tool that helps Alabama residents regroup and successfully move forward. Ultimately, bankruptcy laws were created in order to help Alabama residents, not hurt them.
Thus, if you are scared to file for bankruptcy because you could lose your home, you don’t have to be. Here’s how you can keep your home and get financial freedom from the experienced bankruptcy attorneys at David S. Clark in Opelika, Alabama.
DISCLAIMER: The following blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.
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Consider The Type of Bankruptcy
There are two main types of bankruptcy: Chapter 7 and Chapter 13. While there are a lot of differences between the two, the major point of contention comes from the differing exemptions to which you are entitled.
Property that is exempt generally includes the sort of items that are necessary for living or working (more formally known as the “necessities of life”). While bankruptcy law is foremost concerned with giving debtors a new start, there are still non-exempt properties. Non-exempt property generally covers all items that fall outside of these important necessities of life.
Court rulings and bankruptcy practice experience have established a general idea of what types of property are necessary to live. Below are a few examples of exempt properties that Chapter 7 and Chapter 13 bankruptcy grant.
- Cars (up to a certain value)
- Reasonably necessary clothing
- Household appliances
- Jewelry (up to a certain value)
- A portion of the equity in your home
- Tools of the debtor’s trade or profession (up to a certain value)
- A portion of unpaid but earned wages
- Family homes or “Homestead”
- Personal items (clothes)
- Household appliances and furniture
Consider Your Home Equity
At first glance, it can be disheartening to know you may lose your home if you file for Chapter 7 bankruptcy. Yet, there are still ways for you to keep it. When a trustee is deciding whether your home will be exempt, the overall equity of your home is their only consideration.
Equity is the market value of your house minus the balance on your mortgages or loans. It is important to consider and calculate your home equity because equity under the exemption limit means you can keep your home after you’ve filed for bankruptcy.
Unfortunately, if you have equity in your home over the exemption limit, you may be forced to sell your house to pay your debt or “buy it back” by paying a trustee your overall home value.
Life After Bankruptcy
As long as you continue to pay the mortgage, you are free to keep your home after bankruptcy. Yet, if you are unable to pay, the bank may eventually foreclose your home.
If you are an Auburn or Opelika, Alabama resident facing foreclosure, you are not alone. David S. Clark is a foreclosure defense attorney that is able to help you navigate the difficult waters of home foreclosures.
Auburn and Opelika Bankruptcy Attorney David S. Clark
David S. Clark is an experienced Auburn and Opelika Bankruptcy Attorney that understands the intricacies, complications, and stress that bankruptcy can present. If you need help navigating Chapter 7 or 13 bankruptcy, contact David S. Clark today!
DISCLAIMER: The above blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.