Q: When filing bankruptcy in VA, can I keep a house I am still paying mortgage on?
I have another 15 years of payments on a 30 year mortgage. The house is valued at $150,000.
A: The value of the home is not important, the equity in the home is. If your home is valued at $150,000.00 and you owe $150,000.00 or more on the mortgages on the home, then you have no equity. If your home is valued at $150,000.00 and you owe $50,000.00 on the mortgages on the home, then you have $100,000.00 in equity.
I am not licensed in Virginia, but a quick search show that the exemption of equity in a homestead in Virginia is $10,000.00, which means that a bankruptcy trustee could sell the home, give you the amount that is exempt and use the rest to pay your creditors. If there is enough money to pay the trustee's fees and pay all unsecured creditors in full, then you would receive the excess. Thus, you may need to consider filing a chapter 13 instead of a chapter 7. How much non-exempt equity you have in your home in a chapter 7 will determine how much you must pay to unsecured creditors under the chapter 7 liquidation test.
If you are married and you are going to file a chapter 7 bankruptcy, your spouse will not be filing and you own your home as tenants by the entirety, you may be able to keep the home without regard to how much debt you have.
If keeping your home is important to you, you should make an appointment with an experienced bankruptcy attorney that handles chapter 7 and chapter 13 cases. You can start your search by using the Justia "Find a Lawyer" link at the top of this page.
A: Yes. You can keep the home; however, depending upon the amount of equity, how you hold title and a number of other factors, you will need to determine whether Chapter 7 or 13 is right for you. If there is a fair amount of equity, Chapter 7 may not be a good option. If there is a lot of equity and you want to keep it, then you will need to file a Chapter 13 and repay your other debt over the next few years. Meet with a local Bankruptcy Attorney to determine what is right for you.
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