Q: Can I file bankruptcy on my medical bills and still keep my house?
I want to file bankruptcy on medical bills from my wife having cancer, but I am worried about my house that I have been paying on for 15 years. Can I get rid of the medical bills and still keep our home?
A:
Massachusetts exempts a significant amount of value in your home (meaning that's something you can keep in bankruptcy). Whether or not your home is fully protected depends on the amount of equity you have, but the exemption covers at least $125,000, and in some cases $500,000 in equity, so most people are able to keep their homes while discharging debts like medical bills and credit card debt.
Homeowners who have too much equity to file for Chapter 7 bankruptcy can often get relief through a Chapter 13 plan.
*Kevin Chern is an Illinois licensed attorney who has practiced in federal consumer bankruptcy law and consumer protection law for the last 21 years. He is the Managing Partner of UpRight Law. Kevin's law partners are licensed in all 50 states and work in conjunction with Mr. Chern to provide bankruptcy and consumer legal services in all 50 states. Mr. Chern's answers to the questions are intended for informational purposes only and are not intended to be legal advice. Use of the answers does not establish any attorney-client relationship. For legal advice, you should consult with an attorney licensed to practice law in your state and with appropriate expertise.
A:
Massachusetts has a very liberal homestead exemption, which is $500,000.00. The exemption is normally used to exempt the equity that a debtor has in his/her homestead. There are other factors in the bankruptcy code that can limit the exemption in certain situations. If your wife is disabled as a result of the cancer, that could mean that she can use an additional exemption provision.
To get an accurate answer to your question, you really need to take the time to meet with an experienced bankruptcy attorney that handles chapter 7 and chapter 13 cases. If you have had the same mortgage for 15 years and have no other liens against your homestead, then you should have a substantial amount of equity and you want to use an experienced bankruptcy attorney to make sure you make the right decisions in this matter. Most attorneys will meet with you at no charge for the initial appointment. You can use the Justia "Find a Lawyer" link at the top of this page to search for an attorney.
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