Q: Will filing for bankruptcy affect my house under mortgage in California?

A: When considering bankruptcy in California, your primary residence typically receives substantial protection through the state's homestead exemption laws. These laws protect a portion of your home equity—$300,000 to $600,000 depending on county median home prices. Since you've maintained timely mortgage payments, you're in a better position than many bankruptcy filers.

The type of bankruptcy you file significantly impacts your property outcome. Under Chapter 7, a trustee examines your assets for non-exempt equity that could be liquidated to pay creditors. Your primary residence may be protected by the homestead exemption if your equity falls within statutory limits. However, your investment property (the tenant-occupied condo) receives less protection under California law and could be at greater risk. Under Chapter 13, you typically keep all properties but must pay the value of non-exempt equity through a 3-5 year repayment plan.

Your mortgage obligations continue regardless of bankruptcy filing. While bankruptcy may discharge your personal liability for the mortgage debt, the lender's security interest (lien) remains attached to the properties. This means you must continue making payments to keep the properties—bankruptcy doesn't eliminate secured debts like mortgages. Given California's complex property protection laws and your specific situation with multiple properties, a consultation with a bankruptcy attorney would provide guidance tailored to your financial circumstances, property values, and long-term objectives.