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For most individuals that consider filing bankruptcy, one of the biggest concerns they have is if they are able to keep their home. Although a mortgage may represent a significant debt, it is possible to keep your home and reaffirm the mortgage after bankruptcy. Of course, working with an experienced attorney is recommended when considering bankruptcy, having an understanding of what is to be expected may also help ease some worry associated with this large decision.

Bankruptcy law allows individuals to keep certain properties through the use of exemptions. The homestead exemption is what is used to maintain ownership of your personal residence after bankruptcy. Depending on your state’s laws and which set of exemptions you use, either the state or federal exemptions, you can count your home equity exempt in bankruptcy.

Generally speaking, the difference between your home’s value and what you owe your lender is the equity in which you must exempt. The key to keeping this property post-bankruptcy is to have no more than the maximum equity allowed by the homestead exemption in the property. For most bankruptcy filers, this is typically not an issue. However, if the equity of your personal residence is pushing the tens of thousands, married filers may wish to combine their homestead exemption.

Filing bankruptcy is a big decision, and should be made after discussing your options with an experienced bankruptcy attorney. By working with them, you may be able to identify other options that work better for your situation than bankruptcy. In the event bankruptcy is in your best interests, an attorney can help ease your mind when it comes to keeping ownership of your personal residence.