Bankruptcy is a way for people with huge amounts of debt to be relieved of some of their debt if not completely. It would take ten years however to remove the record that you have filed for bankruptcy on your credit report. Bankruptcy is federal business which means that its laws are basically the same in every state in the country with a few exemptions here and there. Meaning, if federal bankruptcy laws are different from your home state laws, federal laws will prevail when you are filing for bankruptcy. But are you going to lose your home if you were to file for bankruptcy? If you want a definite answer to this question, you need to carefully study bankruptcy laws.
There are a lot of people that think they are going to lose their homes when they file for a Chapter 7 bankruptcy however, the trustee of the bankruptcy can choose to abandon the house over to you when the home no longer has an equity; the equity of course is determined by taking the current market value of the house and taking from that amount the cost of the sale of the house; and the amount of money you paid balances on any liens on the property. When your home is abandoned to you, this allows you to keep the property and live in it as long as you can make your monthly mortgage payments. You need to understand however, that filing for bankruptcy does not lift off any liens or mortgages on the house and you still need to pay them off. You also have to understand that lenders would still have the right to foreclose on your home if you do not pay off the lien or the mortgage on the house as agreed. Before you decide to file for Chapter 7 bankruptcy, it is important to keep a few things in mind.
First of all, if you are overly concerned about losing your home when you file for Chapter 7 bankruptcy, you need to determine whether or not the house has enough equity left in it. This is important so you can determine if the exemptions that are available would be equal or exceed the equity on the house. If the exemptions are found to exceed or equal the equity on the property, you would be allowed to keep your home provided of course that you are able to keep to your mortgage payments ever month. Make sure that you are able to afford the monthly mortgage payments to avoid foreclosure on the property.