Can I Keep My House If I File Chapter 7 Bankruptcy In Minnesota

Posted by Wesley Scott on August 6, 2020 at 5:03 PM
Wesley Scott

home ownership in bankruptcy casesIf you are like me and have high anxiety, having debt would cause you to raise this question. If I file Chapter 7 Bankruptcy in Minnesota, can I keep my home? When you file Chapter 7 Bankruptcy in Minnesota, you are able to keep your home. The reason you are able to keep you home is this; there are state of federal exemptions you can use which allow you to keep your home. If you have a lot of equity in your home, you likely will need to use the Minnesota exemptions. If you don’t have a lot of equity in your home, you will likely use the federal exemptions. Do not worry about which set you should use as a quality Minnesota bankruptcy firm will help you with this.

Now, when we speak about keeping your home, we really are speaking about two issues. One, can I protect the equity in my home if I file Chapter 7 Bankruptcy? That is a yes and is covered above. Second, do I still have to make payments to my mortgage company to keep my home? This is where it gets a little tricky. Technically, a bankruptcy discharge results in your liability on the mortgage going away. You are not legally required to pay the mortgage and the mortgage company cannot sue you for payment. However, the bank’s security interest survives the bankruptcy. This means if you don’t continue to pay on the mortgage you will lose the home to the bank who will exercise their security interest against the home.

This same thing applies to vehicle loans too. You are not liable on the loan after bankruptcy but if you want to keep the vehicle secured to the loan you must continue to pay on the loan.


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A Word from a MN Bankruptcy Attorney, Wesley Scott