Miami homeowners thinking of bankruptcy should know that, according to experts, their home doesn’t necessarily have to be included in a Chapter 7 filing. Since a home is often the most valuable possession that a person ever owns, it may be good to know that getting a fresh financial start may not have to mean giving up a house or condominium. This may be especially important to those individuals waiting for the value of their home to rise again after the recent financial crisis.
Experts say that when a person files for bankruptcy, whether Chapter 7 or another option, all assets must be listed as they stand on the date of filing. This includes current bank balances, retirement and investment accounts, the value of all vehicles and a home’s value. That property value is something that could increase, and some people filing for bankruptcy may be interested in holding off the bankruptcy until some equity can be rescued this way.
The problem with that approach, financial experts say, is that the trustee appointed by the court will probably not want to wait indefinitely in the hope that the home’s value will go up. Some homeowners fear that the trustee’s sale of the home will mean their potential equity would be lost, but it’s pointed out that the equity is just that: potential. The experts caution against not filing bankruptcy out of a desire to save a home’s equity, because that equity may never come.
Filing for Chapter 7 is a big step, but one that may be made easier with the help of a Florida attorney experienced in assisting individuals through bankruptcy proceedings. Arranging a mortgage modification is just one way in which such a lawyer may be of help.
Source: FOX Business, “How Safe is My Home in Chapter 7 Bankruptcy?”, Justin Harelik, August 21, 2013