Will filing for bankruptcy mean I lose my house and car?
I am behind on credit cards and medical bills but still current on my mortgage and car loan. If I file for bankruptcy, will I have to give up my home or car?
1 lawyer answer
Not necessarily. Most bankruptcy systems let you keep certain property using “exemptions,” which protect a set amount of value in items like a home, a vehicle, household goods and retirement accounts. The amounts vary a lot by location.
In the US, for example, a Chapter 7 case can result in non-exempt property being sold, while a Chapter 13 repayment plan generally lets you keep property in exchange for paying creditors over three to five years.
If you want to keep a financed car or house, you usually need to keep making the payments. A lawyer can compare your equity with the available exemptions.
This is general information, not legal advice — speak to a licensed lawyer about your situation.
Answer this question to help the asker — and get found by clients with similar issues.
Sign in to answer