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Is Chapter 7 or Chapter 13 Better for Keeping My Home?

One of the biggest concerns people have when considering bankruptcy is whether they will be able to keep their home. The good news is that bankruptcy law offers you several options that permit you to keep your house in both Chapter 7 and Chapter 13 filings. However, if you are severely delinquent on your mortgage loan payments, it makes a big difference in what strategies will work for keeping it.

If you are eligible to file a Chapter 7 case (meaning you pass the means test) and you are current on your mortgage loan payments, you can typically keep your home. One issue we will need to address is how much equity you have in the house. If there is excessive equity, which means the value of your home far exceeds what you owe on it, then it may be wiser to file a Chapter 13 bankruptcy or consider other available debt relief options.

A Chapter 13 filing can be beneficial for a homeowner that has fallen significantly behind on their mortgage loan. In a Chapter 13 case, you will submit a repayment plan for approval by the court. In your plan, you can provide for small monthly payments to be applied toward your delinquency over a period of three to five years. Once you successfully complete your Chapter 13, you will emerge from your bankruptcy current on your mortgage loan. This type of "catch-up" is not available in a Chapter 7 filing.

If you are in need of bankruptcy relief and you have concerns regarding your home (or any other valuable asset), let us help. We can review your individual finances and determine whether you should file one type of bankruptcy over another, or if there are other more beneficial debt relief options available to you.

We are bankruptcy lawyers who know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation with an attorney at Levitt & Slafkes, PC.

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