Will I lose my home if I file bankruptcy?
People devote a significant amount of their lives searching for the American dream of owning a home. We strive to protect that interest to the fullest extent possible under the confines of the Bankruptcy Code. Under the laws of the State of Utah, a person is entitled to claim a homestead exemption to protect a limited amount of equity in their principle residence. The amount available under this provision permits a single owner to claim $20,000.00 (and joint owners to claim up to a maximum of $40,000.00). But most people don’t realize that if they do not have sufficient equity in their home; or if they do not have the ability to continue to make timely payments on the same, then their house will be in jeopardy of being lost. If you have fallen behind on your house payments, due to medical problems or temporary loss of employment, etc., but that situation has now been remedied; then, it is likely filing a Chapter 13 Bankruptcy Petition will enable you to cure the delinquent house payments and allow you to protect your home from foreclosure. Under the provisions of Chapter 7 of the Bankruptcy Code, upon filing the Bankruptcy Petition, an independent person (the Chapter 7 Trustee) is appointed to review your financial status, and make a determination as to whether there is sufficient equity in your house to warrant selling it in order to pay a portion of your debt. The Chapter 7 Trustee approaches this issue primarily on a mathematical basis. He/She considers the fair market value of your house, less the amount you owe on it, less your applicable homestead exemption claim, less the costs that would be incurred in the marketing of the property (this includes real estate commissions and closing costs). If after deducting all of those relevant amounts, there is still a significant amount of money that would be available to distribute to Creditors, the Chapter 7 Trustee would elect to market the home. Due to significant importance of this asset, it is most important that you contact our office to schedule an appointment to allow us to consider all of the factors in your case to determine whether or not your home is likely to be considered a concern. At that time, we can discuss the various Chapters in Bankruptcy, and the advantages each provides given your particular circumstances.
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Jory L. Trease, Inc.    |    Salt Lake City    |    Taylorsville    |    (801) 596-9400    |    E-mail: questions@jtbankruptcy.com