Well, you know by now that the answer is:  It depends.

If you file Chapter 7, and either are current or get current with your mortgage(s), then you can most likely keep your home.  (Assuming you don’t have an equity interest that exceeds the homestead exemption.  As to which, see this blog post:  California Homestead Exemptions Increased as of January 1, 2010. Other California Bankruptcy Exemptions will increase on April 1, 2010.)

If however, you are in arrears, and are not able to bring the loan current, then–unless you can complete a mortgage modification that allows you to stay–you are likely lose the home.

On the other hand, if you file Chapter 13, and are able to successfully get a payment plan approved by the Court, then you may be able to stay.  This is because in a Chapter 13, you can take the outstanding mortgage arrearages, and pay them back through the Chapter 13 plan over the 3 to 5 year commitment.

But don’t try to do this analysis yourself. Talk to a bankruptcy lawyer before you get too excited. There are lots of nit-picky little rules that can torpedo an otherwise possible successful Chapter 13.  You need to do the analysis up front.



%d bloggers like this: