Q: If you file Chapter 7 bankruptcy but not on your home and land could the courts take your property and home and sell it
A: In bankruptcy, you get to retain any assets which are covered by state and federal exemptions. The key to determining whether your home will be safe in bankruptcy is determining how much equity you have in your home (the home's value less any mortgages, liens, etc.) and how much equity your state's exemption protects. Use Justia's Find a Lawyer tool to set up a consultation with a local bankruptcy attorney who will do this analysis as part of your consultation.
A: Good afternoon. It's a common misunderstanding that you can choose which assets or debt to "file bankruptcy on." The Bankruptcy Code says that when a case is filed, an estate is created, which includes everything you own, regardless of where it is located, and also includes all of your debts. So if you file a Chapter 7 case you are giving control to a bankruptcy trustee, who has the ability to try to sell property if he or she believes that it could be used to pay your creditors. Normally a Trustee would not sell property if the only result would be to pay the mortgage on that property. Usually a Trustee is only interested in property that might have "equity" -- that is, could be sold for more than is owed. You also have the ability to claim a certain amount of that equity "exempt" from sale by the Trustee. Getting into questions of value and exemptions can be tricky. Where your home is at issue, you owe it to yourself to consult an experienced bankruptcy attorney who can advise you whether filing Chapter 7 is a good idea. You might also consider whether Chapter 13 would address your financial problems. Chapter 13 has a different set of advantages and disadvantages, but a Chapter 13 Trustee cannot sell your property.
Wishing you the very best,
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