Bankruptcy & Can I Keep
My Home

Will I Lose My House in Bankruptcy?

Easy.  You will not lose your home by filing bankruptcy.  In Arizona, a family can file bankruptcy and protect their home and it’s equity up to $150,000.  Most homes have limited or small amounts of equity and a homeowner merely needs to remain current on their mortgage payments to keep their home.  If a home has significant equity, we often advise clients to get a residential appraisal prior to filing a case.  That said, we have filed many thousands of cases and never had a debtor lose their home from having filed bankruptcy.

In the rarest of instances, a home could have equity that creates concern.  An attorney will carefully review scenarios where a homeowner has significant equity created through fraudulent transfers or preferential pay downs, or recently purchased a home with liens improperly perfected.  When these rare scenarios exist, a homeowner is advised not to file bankruptcy.

Bankruptcy Can Actually Save Your Home

If you are behind on mortgage payments and in default, and even if there is a pending trustee sale, a bankruptcy can temporarily halt a foreclosure or even provide a homeowner the opportunity to bring the mortgage payments current through a repayment plan.  The moment you file for bankruptcy, the judge issues an automatic stay which puts a stop to all foreclosure activities.  In addition, in a Chapter 13, you can legally eliminate second mortgages through a process known as “lien-stripping.”