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Your Home and Chapter 7

Michael Agruss

Written and Reviewed by Michael Agruss

  • Managing Partner and Personal Injury Lawyer at Mike Agruss Law.
  • Over 20 years of experience in Personal Injury.
  • Over 8000+ consumer rights cases settled.
  • Graduated from the University of Illinois Chicago School of Law: Juris Doctor, 2004.

If you’re struggling financially and considering filing for Chapter 7 bankruptcy, you may be wondering about the future of your house and what you can do to protect it. In Chapter 7, you can protect your house if you are current on your mortgage and do not exceed your permitted amount of equity in the house, known as the “homestead exemption.”However, if your house is in foreclosure or could be foreclosed on, Chapter 7 cannot stop this. The foreclosure would be delayed during your “automatic stay,” a period after filing for bankruptcy in which all debt-collection efforts are barred, but the automatic stay is temporary and a bank can also file a motion to lift the stay if it so chooses.It’s important to understand that Chapter 7 does not eliminate “secured” debt, meaning backed by collateral (such as your house), but rather unsecured debts such as for credit cards and medical expenses. If you are behind on your mortgage but wish to keep your house, you may review your options with a bankruptcy attorney to make the decision that’s right for you.If you are struggling with debt and considering filing for bankruptcy, you’re not alone. Contact an experienced bankruptcy attorney today for a free consultation.

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