But I want to keep my house!

 One of the biggest concerns people have when they meet me is whether they can keep their house if they file bankruptcy.  Fortunately the answer is usually "Yes, if ..."

The "if" part of the answer is that if you have a mortgage against your home you will, in any ordinary case, have to keep paying it.  If you have equity in your home, we can protect up to $450,000.00 of equity ("value minus mortgage balance") (more for farmers) and up to 160 acres in size, so it is unlikely that the trustee will try to take your home.

Now, sometimes, if you have two mortgages and if the first mortgage is more than the total value of the house, we can get rid of the second mortgage in a chapter 13.  And if you are behind on payments when you file bankruptcy, we can catch up in a chapter 13.  And on three occasions during my career I've run into a mortgage that's not valid because it was a refinance of a homestead and only the husband signed the mortgage.  

Other than that sort of situation, who will take your home is your mortgage company if you don't pay them. As a practical matter the mortgage company may stop sending you statements, so you will have to push the payments from your end rather than having the company pull it from your end.

But if you are current on your home mortgage when your case is filed, "all" you have to do is to stay current.

What will the trustee take?

Most people file a chapter 7 bankruptcy.  In a chapter 7 bankruptcy the trustee may claim some of your stuff.

There are two sets of exemption we can use in "state" and "federal".

The "state exemptions" protect (generally) $450,000 of equity in your home; $5000 of equity in one car;  $11,250 of household goods; $3,062.50 in wedding rings exchanged at the ceremony; tools of trade of $12,500 ($13,000 for farmers); three-fourths of wages due but not paid; Social Security benefits; and (in a bankruptcy context) $1,512,350 of 401(k) or IRA accounts.  There are some other exemptions that aren't as common.  The homestead exemption is single or joint;  the others are per person.

The "federal exemptions" protect $27,900 of equity in your house, $4450.00 in a car; $14,875 of household goods ($700.00 per item); $1875.00 of jewelry;  $1,512,350 of 401(k) or IRA accounts; Social Security benefits; and a wild card of up to $15,425,00.  And like the state exemptions,  there are some other exemptions that aren't as common.  These exemptions are per person.

What we do is match up what you own against this list (we can't pick and choose -- we need to use one list or the other) and see what doesn't fit into each little bucket.  The trustee gets what "doesn't fit".

Many people -- maybe most people -- who don't have a lot of equity in their home will be able to fit all their assets into the federal exemptions.,

Now, the trustee can't just take your "excess stuff";  he has to turn it into cash.  And to do that he has to sell it to someone.  You are the logical target market.  So if you have "excess stuff" we can sometimes haggle with the trustee and buy it back at a discount.

As always, this is at least mildly complicated;  that's why we meet in person or by Zoom and discuss and work these things out.  Feel free to call me at 320-252-4473.