How to Keep Your House After Bankruptcy in New York
Experiencing bankruptcy can be overwhelming, but it's important to know that losing your home isn't inevitable. If you're a homeowner in New York and facing financial difficulties, there are steps you can take to keep your house after declaring bankruptcy. Here’s a detailed guide on how to navigate this challenging situation.
1. Understand the Types of Bankruptcy
In the United States, the most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. Chapter 7 bankruptcy may liquidate non-exempt assets, while Chapter 13 allows you to create a repayment plan to keep your assets, including your home. Understanding which type of bankruptcy you are filing will significantly impact your ability to retain your house.
2. Know Your Exemptions
New York State provides certain exemptions that protect your home from being sold during bankruptcy. Under New York law, each individual can protect up to $170,825 in equity in their primary residence. If both spouses are filing, this amount doubles, allowing for more substantial protection. Familiarize yourself with what's considered exempt and non-exempt property to safeguard your home.
3. File for Chapter 13 Bankruptcy
If you want to keep your home and have regular income, consider filing for Chapter 13 bankruptcy. This type of bankruptcy allows homeowners to catch up on missed mortgage payments through a court-approved repayment plan that lasts three to five years. This option can be a lifeline, as it stops foreclosure proceedings and gives you a structured way to retain your house.
4. Keep Making Mortgage Payments
Regardless of the type of bankruptcy filed, it's crucial to keep current on your mortgage payments. If you can maintain regular payments, you're less likely to face foreclosure. After filing, the automatic stay that goes into effect can temporarily halt foreclosure actions, but it's essential to resume payments as soon as possible to avoid any complications.
5. Consider a Loan Modification
If you're struggling to make payments, reach out to your lender to discuss a loan modification. This can lower your monthly payments and make your mortgage more manageable. Many lenders are willing to work with homeowners who are in bankruptcy, so don’t hesitate to explore this option.
6. Seek Professional Assistance
Navigating bankruptcy can be complex, especially regarding your home. Hiring an experienced bankruptcy attorney can provide invaluable guidance throughout the process. They can help you understand your rights, evaluate your options, and represent your interests effectively during bankruptcy proceedings.
7. Stay Informed About Your Bankruptcy Case
Stay engaged with your bankruptcy case by attending hearings, understanding timelines, and submitting any required documents promptly. Awareness and proactivity can avert unnecessary complications that may jeopardize your home.
Conclusion
While bankruptcy can feel like a daunting experience, it doesn’t have to mean the loss of your home. By understanding your rights, keeping up with mortgage payments, and considering Chapter 13 bankruptcy, you can increase your chances of retaining your house. Always consult with a qualified professional to help guide you through these legal waters, ensuring that you make the best decisions for your financial situation.