Filing for bankruptcy can be overwhelming, especially when it comes to concerns about keeping your home. You might be asking: Do you lose your home if you file bankruptcy in Michigan?
No, filing for bankruptcy in Michigan does not automatically mean losing your home. Michigan’s homestead exemption protects up to $46,125 of home equity in most cases, allowing many homeowners to keep their primary residence during bankruptcy. However, eligibility depends on the type of bankruptcy filed and the amount of equity in the home.
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FAQs About Keeping Your Home in Michigan Bankruptcy
Do you automatically lose your home in bankruptcy?
No. Filing for bankruptcy does not mean you will automatically lose your home. Michigan’s homestead exemption protects a significant amount of equity in your primary residence.
What is the Michigan homestead exemption amount?
The Michigan homestead exemption protects up to $40,475 in equity ($60,725 if you are 65 or older or disabled). This protection applies only to your primary residence.
Can you stop foreclosure by filing bankruptcy?
Yes. Filing bankruptcy triggers an automatic stay that temporarily halts foreclosure proceedings. This gives you time to explore repayment or modification options.
What happens to your mortgage in Chapter 7 bankruptcy?
You must stay current on mortgage payments to keep your home in Chapter 7 bankruptcy. Reaffirming the loan may also be necessary.
Can Chapter 13 bankruptcy help you save your home?
Yes. Chapter 13 allows you to include mortgage arrears in a repayment plan, making it easier to catch up on past-due payments.
What happens if your home has non-exempt equity?
If your home has non-exempt equity, it may be sold in Chapter 7 bankruptcy. Filing Chapter 13 or negotiating with creditors may allow you to keep it.
How can an attorney help protect your home?
An attorney can apply exemptions, negotiate with creditors, and guide you in selecting the best bankruptcy chapter to protect your home.
