Can I Keep My Home If I File For Bankruptcy in New York

Common question that is asked is “Can I keep my home if I file for Chapter 7 Bankruptcy in New York.”  The answer is usually yes, with several caveats.  First, the home has to be your primary residence.  It cannot be investment property, which is not exempt in a Chapter 7 filing.  Next, you have to look to how much equity you have in your home.  You can exempt up to$50,000 in equity if you own a home, $100,000 if the home is jointly owned.  So you say to yourself….”Self, do I have more than $50,000 in equity in my home?”  To determine that, you really really really need to get an appraisal.  I cant stress this enough.  The real estate market has been, and likely will continue to plunge in New York.  Home values are decreasing quite quickly.  What that means is that if you had $60,000 in equity in your home in December, you may now have much less in April.  The only way to determine that is to get a professional appraisal done on your home.  You then deduct all home equity loans, 2nd mortgages, etc., to come to a number.  If that number is below $50,000, and provided there were not fraudulent conveyances of the home in the last 6 years (Mother to son, Husband to wife, etc.) you should be able to keep your home and still get rid of your other unsecured debts.  As I have stated previously, you also have the option of walking away from your home in a Chapter 7 Bankruptcy.  Many people chose to do that if their home is underwater (meaning they owe more on the mortgage than the house is presently worth.)  The option is yours, and as always, please speak to a Bankruptcy attorney before deciding to file.

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