Can I keep my house when I file bankruptcy?

If you are current on your payments:
Yes, it is possible to keep your house and file for bankruptcy. If you qualify for a Chapter 7 bankruptcy (which wipes out the majority of most debts), then you can keep your home if you are current on the monthly payments and you do not have excess equity in your home. Currently the State of Ohio allows each owner of a home to keep $132,900 of equity in their house. The value of your home is typically determined by using the auditor value, but, if you are borderline on having over $132,900 of equity, then it may be recommended that you get an appraisal.

If you are not current on the payments:
If you are not current on your mortgage payments and you cannot get caught up or work out a loan modification agreement with your lender, then it may be recommended that you do a Chapter 13 bankruptcy. A Chapter 13 bankruptcy allows you to file for bankruptcy protection, which will stop any foreclosure or threats of foreclosure, and enter into a monthly repayment plan. This can be particularly useful because the bankruptcy filing stops the accumulation of fees assessed when you become behind on the payments. In order to make a Chapter 13 repayment plan work, you must have an income stream that shows you can afford the normal monthly mortgage payment plus a repayment of any mortgage arrears over 5 years. If you are unsure of whether you would be able to afford this payment, my office will work up an estimated Chapter 13 payment free of cost. If your home has reduced in value and there is no equity for your second mortgage to attach, then a Chapter 13 will allow us to avoid the second mortgage completely.