Can I Keep My Home If I File For Bankruptcy?
Yes, the simple answer is that you will be able to keep your home if you compensate the Trustee for the value of any equity in your home.
For example, if your home is valued at $300,000 and your outstanding mortgage is $250,000, you will have equity of $50,000 before selling commissions other expenses. Your creditors are legally entitled to this amount, so for you to keep your house you need to provide the trustee with funds to cover that equity. These you will have to borrow from friends or family.
If your house was valued at $260,000 with a mortgage of $250,000, then it is unlikely that your Insolvency Trustee would take possession of your house, because the difference of $ 10,000 would likely be used up in real estate commissions and other disposal costs, so your creditors would get nothing.
- I Am In Debt But I Own A House. Can I Go Bankrupt?
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