Know What Type Of Bankruptcy You Are Filing
The type of bankruptcy you choose will directly affect what happens to your home. A bankruptcy lawyer can help explain the differences and guide you through the process. In Chapter 7 bankruptcy, the court may sell non-exempt assets to repay creditors. In contrast, Chapter 13 allows you to set up a repayment plan and typically lets you keep your property, including your home, as long as payments are made according to the plan.
Understand Homestead Exemptions In Connecticut
Connecticut offers homestead protection, which allows you to protect a portion of your home equity during bankruptcy. As of this writing, the exemption is $250,000 for your primary residence. This means if your home equity is below that threshold, it may be protected from creditors in most bankruptcy cases.
It’s important to calculate your home’s current market value and the remaining mortgage balance accurately. That difference is your equity, and it determines whether your home is at risk. Make sure you are using the most up-to-date exemption rules and consider speaking with a legal professional about how they apply.
Stay Current On Mortgage Payments If Possible
If you are able to keep up with your mortgage during the bankruptcy process, your chances of keeping your home improve significantly. Missed payments can increase the risk of foreclosure, even if the bankruptcy filing temporarily stops collection efforts.
In a Chapter 13 filing, the repayment plan can include overdue mortgage amounts, allowing you to catch up over time. However, new payments must still be made on schedule after filing. Careful budgeting is key.
Be Prepared For The Court’s Review
When you file for bankruptcy, the court will review all assets and debts, including your mortgage, home value, and any liens against the property. If there is significant non-exempt equity in the home, the court may explore options for using that equity to repay debts. In a similar way, recognition for excellence in legal service highlights how selecting the right professional can make a meaningful difference in outcomes—especially when complex evaluations and documentation are involved.
Work With A Legal Professional To Avoid Missteps
Protecting your home through bankruptcy requires more than just filing the paperwork. Timing, exemptions, and court procedures all affect the outcome. A mistake in how you present your financial details could put your home at unnecessary risk.
Attorneys like those at Eric Lindh Foster Law, LLC can help you navigate this process and protect what matters most. Working with an attorney gives you the insight needed to approach your filing strategically and avoid common errors that may cost you your home.