You may be able to retain your home if you have no “equity” in the property. If your home is currently valued at less than the outstanding amount of your mortgage (or the outstanding amount of your first, second, third mortgage, etc. when combined), then you home has no value as an “asset” to you or your bankruptcy estate. Assuming you meet all other requirements of the Chapter 7 bankruptcy, then you may be able to keep your house and discharge all your remaining debt.
A debtor is permitted to keep (“exempt”) up to $15,000 equity in his or her home. If a couple files jointly, that is doubled to $30,000. “Equity” is the value of your home over and above the total outstanding debt on your mortgage(s). If your home is worth $150,000 and your mortgage is $90,000, then you have “equity” in your home valued at $60,000. If the house is in the name of you and your spouse, then you may qualify for relief under Chapter 7, keep your home and the equity in your home, and still discharge all your “unsecured” debts (which would include credit cards, medical bills, personal loans, etc.).
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