Some people with serious debt problems put off filing bankruptcy because they think they will lose their home. In reality, filing bankruptcy may be the best way to save your home if you have serious debt problems.
If you file Chapter 7 bankruptcy in South Carolina, the bankruptcy homestead exemption protects up to $58,255 in home equity for an individual and up to $116,510 if you are married and file a joint income tax return. “Exemption” means that creditors cannot force the sale of your home and take that equity pay off your debts.
If you are behind on your mortgage payments, you will still need to get caught up on the payments if you want to keep your home. Here, too, bankruptcy can help. Bankruptcy includes an injunction called the automatic stay that protects your home from foreclosure. In addition, by allowing you to discharge debts such as medical or credit bills, you may find that you are better able to keep up with your payments. You may even qualify for a mortgage modification.
If you are not eligible for Chapter 7 bankruptcy, or if you own property is isn’t protected by the homestead exemption, you can still stop creditors from taking your property by filing Chapter 13 bankruptcy. Chapter 13 bankruptcy is a court-approved payment plan that gives you time to restructure your debts. It also allows you to reduce the amount you have to pay for unsecured debts such as credit card and hospital bills.
Bankruptcy exemptions protect equity in your home, retirement savings and many other types of personal property. The Reed Law Firm in Columbia offers a free initial consultation to explain what property you can keep if you file bankruptcy.