Filing for bankruptcy doesn’t automatically mean you’ll lose your home. Here, the bankruptcy attorneys at Greene Law, PC, serving clients throughout the state of Connecticut, share some advice on the different types of bankruptcy and how you can protect your residence from being seized as part of your repayment.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a great way to protect your home and get out of debt. With this type, you’ll create a repayment plan that will spread out your debt over a period of months, reducing or eliminating some debts and giving extensions on others. You can also eliminate a second mortgage and other liens against your property with Chapter 13 bankruptcy.

The main requirement for this type of bankruptcy: You must make enough money to afford the repayment plan. A bankruptcy attorney will be able to give you advice on whether a Chapter 13 would be the best option based on your individual circumstances.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy manages the debt through a bankruptcy trustee. They will work to liquidate all non-exempt assets to pay off the debt.

To save your home when filing for this type of bankruptcy, you must be current on all mortgage payments or work out a plan separately with the lender. If the loan is in good standing, your house may be protected with a homestead exemption.

The homestead exemption varies in every state, but generally, it states every person filing for this type of bankruptcy will have a set amount of equity protection from liquidation. However, if your mortgage balance is above the legal limit when the equity protection is deducted, you may lose your residence. Some states also allow homeowners to double the homestead protection amount if they are filing jointly with their spouse.

In Connecticut, the homestead exemption amount is $75,000 for a single owner and $125,000 for a married couple filing jointly. A bankruptcy attorney from Greene Law, PC will be able to help you figure out if you qualify based on their extensive knowledge of state laws. 

If you need help managing your debt or want legal routes to protect your Connecticut home, call Greene Law, PC at (860) 676-1336 or visit their website. Their bankruptcy attorneys specialize in credit repair and will be happy to help you find the best solution for you.