Many Oklahoma homeowners are afraid to file for bankruptcy because they think that it will cost them their house. However, bankruptcy laws largely protect your family home from liquidation so long as some requirements apply. You should not let this fear keep you from filing for bankruptcy.
Most people can keep their homes
One of the main features of bankruptcy law is that there is a homestead exemption that can keep your home in your possession. For the most part, your home stays with you as long as the equity that you have in it is below a certain threshold. The government does not want you to be homeless, and public policy requires that they make allowances for you to keep your home. Otherwise, nobody would take advantage of the bankruptcy laws.
You must be able to afford your mortgage
Moreover, you need to be able to afford to make your payments after bankruptcy is complete. If the mortgage is beyond your means, you might have to give up your home. However, being debt-free increases the chances that you can retain the home. In general, you’ll have a much better chance of maintaining your residence if you declare a Chapter 13 bankruptcy as this is a restructuring instead of a liquidation. Nevertheless, your home is not automatically liquidated during a Chapter 7 bankruptcy. The latter type of bankruptcy is less flexible since it involves debt forgiveness as opposed to restructuring.
A bankruptcy attorney could help guide you through the process. If you’re worried that you might not be able to keep your home, consult with the lawyer before you file. An attorney can tell you if you’re one of the exceptions to the general rule. They could also advise you which type of bankruptcy filing is better for your particular circumstances. The fear of losing your home does not have to keep you from a fresh financial start.