Will Bankruptcy Affect My Homeownership?
Are you considering filing for personal bankruptcy in South Florida but worried about how it will affect your homeownership? According to data from the US Department of Housing and Urban Development (HUD), approximately 66 percent of Americans are currently homeowners, a percentage that is only slightly below the record high of more than 69 percent back in 2004. As HUD underscores, homeownership is a goal for many Floridians and one of the key markers of success. As such, the prospect of losing a home due to financial difficulty can be devastating. It is critical to know that Florida law provides an extremely generous “homestead exemption” to Florida homeowners that allows them to keep all of the equity in their home even when they are filing for a liquidation bankruptcy, and in addition, a reorganization bankruptcy filing might actually help you to stay in your home if you are behind on payments. Consider the following information.
Florida’s Homestead Exemption Exempts All Equity in Your Home
If you have a substantial amount of equity in your home, or if your home is paid off, even if you are filing for Chapter 7 bankruptcy in which non-exempt assets will be liquidated, you should know that the equity in your home will not be liquidated. You will be eligible to claim the state’s homestead exemption if the following are true:
- Your property is not bigger than 1/2 of an acre if it is in a municipality or 160 acres if it is outside a municipality; and
- You owned the home for at least 1,215 days before you filed your bankruptcy petition.
Reorganization Bankruptcy Can Save Your Home from Foreclosure
What about a situation in which you are behind on mortgage payments and concerned about losing your home? If you file for reorganization bankruptcy — typically under Chapter 13 for most Florida consumers — your bankruptcy filing can actually help you to keep your house and to remain a homeowner.
How does this work? In short, in a reorganization bankruptcy, you will restructure debts and repay creditors over time through a repayment plan, usually for three or five years. In that time, you can catch up on back-owed mortgage payments and become current with your servicer again.
Contact Our West Palm Beach Bankruptcy Attorneys for Help with Your Personal Bankruptcy Case
Homeownership is a goal for Americans in Florida and across the country, and the prospect of losing your home can be devastating. As we discussed above, not only will all of the equity in your home be protected if you file for personal bankruptcy, but a reorganization bankruptcy filing can actually help you to keep your home if you are at risk of foreclosure. To find out more about homeownership and bankruptcy based on your particular circumstances, you should get in touch with an experienced West Palm Beach bankruptcy lawyer at Kelley Kaplan Delaney & Eller, PLLC. We can discuss your financial situation with you today and help you to understand and weigh your bankruptcy options. Contact our firm for additional information about how we can assist you or to get started on your bankruptcy petition.
Sources:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0222/0222ContentsIndex.html
law.cornell.edu/uscode/text/11
