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Can you keep your home when you file for bankruptcy?

Many people in Texas struggle with staying on top of their bills and finances. If you list yourself among them, you may be looking for ways to find some potential relief. If you are thinking about filing for bankruptcy, you may, like many others, worry about whether your doing so might place your home in jeopardy.

Per U.S. News and World Reports, whether your home is at risk when you file for personal bankruptcy depends to some extent on whether you file for a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.

Chapter 7 bankruptcies and your home

Chapter 7 bankruptcies are also liquidation bankruptcies, meaning you may have to sell some of your property before you may discharge debts. However, Texas is pretty generous when it comes to recognizing bankruptcy exemptions, and it recognizes certain exemptions that allow most filers to keep their homes, provided they do not miss mortgage payments. If a Texas home is your primary residence, the state’s Homestead Exemption allows you to protect an unlimited amount of its equity.

Chapter 13 bankruptcies and your home

Chapter 13 bankruptcies are reorganization bankruptcies that have you reconfigure your debts so that they become easier for you to pay them down. You should not have to sell your property in a Chapter 13 bankruptcy and your home is typically not in danger unless you miss mortgage payments or fail to abide by the guidelines of your payback plan.

While losing your home may be among your concerns, it is not the only variable to consider when deciding whether to file for bankruptcy and what type might better suit your needs.


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