When people consider the possibility of bankruptcy, they are often concerned about losing some of their assets. In particular, we are sometimes asked whether people will lose their house if they file a Chapter 7 Bankruptcy. In Fort Worth, filing a bankruptcy does not mean you will automatically lose your house.
Texas has a favorable homestead exemption. If your house is your primary residence, it will be exempt from creditors as your homestead. That being said, it is important to remain current on your mortgage payments. While most of the debts generally get discharged in a Chapter 7 Bankruptcy, you will have the option to reaffirm your obligation under the mortgage and remain responsible for that debt. Typically, a Reaffirmation Agreement is entered between the mortgage company and the debtor, which allows the debtor to remain personally liable for the mortgage debt after the bankruptcy case is closed. The debtor continues to make their regular mortgage payments and retains the property.
In certain situations, debtors may choose not to enter into a Reaffirmation Agreement with the mortgage company. Debtors who do not enter into a Reaffirmation Agreement will have their personal obligation under the mortgage discharged through their bankruptcy. However as long as the debtor remains current on their mortgage and continues to make their monthly payments, they can usually keep their house as well, although there are some drawbacks.
For more information about how a bankruptcy may affect your house or about Reaffirmation Agreements, contact an experienced Fort Worth bankruptcy lawyer. If you would like a free consultation with an experienced and dedicated Fort Worth bankruptcy lawyer call Michael P. O’Donnell at 817-732-7590 or 972-819-3861, or E-mail me at email@example.com.