It may be possible to keep your Ohio home after filing for Chapter 7 bankruptcy. However, that will depend on how much equity that you have in the property. Furthermore, you’ll need to remain current on your home loan to retain ownership of the property. Let’s take a closer look at how filing for protection from creditors might impact your housing situation.
How much equity is in your home?
If you have less than $136,925 of positive equity in your home, you will likely be able to keep it after filing for liquidation bankruptcy. The trustee overseeing your case may still decline to sell your home even if you have positive equity in excess of state limits. This is because the trustee will need to factor in the potential costs of selling the home when determining if it is in a creditor’s best interest to do so.
Can you afford to continue paying your mortgage?
Generally speaking, a mortgage company cannot foreclose on a property while a bankruptcy case is pending. However, a judge may grant a lender the ability to do so if you fail to make payments on your mortgage in a timely manner. It’s also important to note that a lender may be given the right to take action before your case is over if you have negative equity in a property. A bankruptcy law attorney may be able to provide more information about what a lender might do if you stop making mortgage payments.
You may be able to get your home back
Even if the trustee takes possession of your home, it may still be possible to regain it. Typically, this involves buying the property back from the trustee at its appraised market value.