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How much equity can i have in my home and still file chapter 7?
At Liviakis Law Firm, we understand that you might have questions about filing for bankruptcy, especially when it comes to your home equity. One of the most common questions we get is, “How much equity can I have in my home and still file Chapter 7?” To answer this, it’s important to understand the basics of Chapter 7 bankruptcy and how equity is considered in the process.
The Basics of Chapter 7 Bankruptcy
Chapter 7 bankruptcy, often referred to as “liquidation bankruptcy,” involves the selling of your non-exempt assets by a trustee to pay off your creditors. This may bring up concerns about your home, especially if you’ve built up significant equity.
Home Equity and Bankruptcy
Equity is the difference between the current market value of your home and the amount you owe on your mortgage. If you own a home, the equity you have in that home is considered an asset in bankruptcy. A local bankruptcy attorney can explain how to calculate equity in a personal family residence located in California.
Exemptions in Bankruptcy
Fortunately, bankruptcy law allows for certain exemptions, which are assets that the bankruptcy trustee cannot sell to repay creditors. These exemptions vary by state. In some states, homeowners may be able to exempt a certain amount of home equity.
Equity Limits in Chapter 7
How much equity you can have in your home and still file for Chapter 7 bankruptcy depends on your state’s homestead exemption. If your equity is less than your state’s homestead exemption, you can keep your home.
When Equity Exceeds the Exemption
If your equity exceeds your state’s homestead exemption, the trustee could sell your home to pay your creditors. However, you would receive an amount equal to the exemption from the sale.
Considering Chapter 7 Bankruptcy?
If you’re considering filing for Chapter 7 bankruptcy and are concerned about your home equity, it’s crucial to consult with an experienced attorney who can guide you through the process and help protect your rights. At Liviakis Law Firm, we’re committed to helping our clients navigate through these challenging times. Call us today at 916 459 2364 to schedule a consultation with a knowledgeable chapter 7 bankruptcy lawyer.