In VA can you file Chap 7 bankruptcy and keep your home?

Answer 1

First off...BK is a Federal matter...while some States have some rules that you may elect to have apply in the Federal District courts of that region, they are fairly minor and are really to make definitions used locally adhere to the process. It is possible to keep a home...of course not without paying the mortgage, having it up to date, and really not having much equity in the property. Basically, not enough there for creditors to care about, and no reason for the lender to really be on the hook. (And of course, if you don't pay others, or borrow and use ti, to pay your mortgage, that probably won't pass muster as being preferential payments). Clearly, it would be unfair to not pay others what you owe and have the debt discharged in BK, while keeping a valuable property. Obviously, you should speak to a professional about your specific situation.

And nonprofessionals should not answer questions they know nothing about. Bankruptcy is a federal procedure in a federal court, but some states have limited their residents to using state exemptions, so the answer to you question depends on VA law. Most states have opted out of the federal exemptions and a few allow debtors to choose either state or federal exemptions. The main issue is the amount of equity in the house (the value of the house at current market rates less the amount of the mortgage(s)), A lot of people have no equity these days, so you may have no problem. You will have to reaffirm the mortgage debt and you may be able to strip off any second mortgage or home equity balance. Consult an experienced bankruptcy lawyer in your area.