Filing bankruptcy immediately puts a stop to foreclosure on your home and repossession of your car. But what comes next? At the end of the day, are you going to be able to keep your home and car?
At John T. Turco & Associates in Omaha, our lawyers help clients understand all of the possible consequences of filing bankruptcy before we move forward with a case.
The Effects of Bankruptcy on Your Home
Your ability to keep your home in bankruptcy partially depends on why you are considering filing. People who file bankruptcy because they cannot afford their mortgages are in a different situation from homeowners who file bankruptcy because of other debts such as credit cards or medical bills.
Keeping your home in a Chapter 7 bankruptcy depends on the state in which you live:
- In Iowa, you can keep ALL of the equity in your home if the debts existed before you purchased your home. If some debts were created after you purchased the house, your attorney will calculate how much equity is protected.
- In Nebraska, you can only protect up to $60,000 of equity in your home. (Chapter 13 bankruptcy is a much better alternative if you exceed this amount).
If you are behind on your mortgage, Chapter 13 bankruptcy will allow you to pay your arrears (back mortgage payments) over a three- to five-year period. You will still need to keep up with your current payments moving forward.
The Effects of Bankruptcy on Your Vehicles
A car is treated similarly to a home in some ways, but different in other ways. One big difference is the so-called 910-day rule.
If you file Chapter 13 bankruptcy on a car that you bought less than 910 days earlier, you will have to pay back the full amount of the loan over the course of the repayment plan.
After 910 days, on the other hand, you only have to pay back the book value of the car. Of course, you can also give the car back and pay nothing.
Our attorneys will carefully examine all aspects of your financial situation in order to fight for you to keep your home and car in bankruptcy. If you are filing for Chapter 7, it is especially important to know beforehand whether any assets will be sold off by the court.
Contact us to get the skilled, detailed attention you need when you are trying to keep your home and car while filing bankruptcy or to arrange a free initial consultation. If you cannot come to our Omaha offices, we can consult with you by telephone.