Q: If I own a house can I still file for bankruptcy and not lose my house?

A:  Absolutely!  A lot of the time, people file bankruptcy in order to save their house from foreclosure.  Depending on the type of debt you have and the amount of equity in your house will determine if you qualify for a Chapter 7 or Chapter 13 bankruptcy.

If most of your debt is unsecured and you have little to no equity in your house, depending on the amount of your income, a Chapter 7 bankruptcy may be the right option for you. In a Chapter 7 bankruptcy, you can discharge all general unsecured debts. The bankruptcy automatic stay will stall or “stay” any priority unsecured debts until your case is discharged (generally after 90-120 days). Secured creditors are not allowed to repossess property, without permission from the court, even if you are behind on your payments to them. 

On the other hand, if most of your debt is secured or you have too much income for a Chapter 7 bankruptcy, then a Chapter 13 bankruptcy may be the way you need to go. In a Chapter 13 bankruptcy, we will propose a repayment plan to repay certain creditors based on their rank and your income. Once a proposed plan is approved by the Trustee and Court, the Trustee will begin the flow of money back to creditors that are provided to receive payment through the proposed plan.