How to Keep My House in Chapter 7 Bankruptcy in Connecticut
Chapter 7 bankruptcy allows you to liquidate your assets and use them to pay off your debts. Your home is considered an asset, but you may be able to keep it if you can bring your mortgage payments up to date. Connecticut allows you to claim more equity in your home as exempt than the federal government does, so you may be able to keep your home even if you have substantial equity in it.
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Instructions
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Catch up with your mortgage payments if you have fallen behind. Both federal and Connecticut laws require you to stay current with your mortgage to claim a homestead exemption.
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Get your home appraised to determine the fair market value of the home. You will use the fair market value in calculating your equity.
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Calculate the equity in your home by subtracting your home's value from the amount of money you owe on the mortgage. For example, if the house is worth $50,000 and you owe a mortgage of $30,000 your equity is $20,000.
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File a federal homestead exemption if you have equity of $20,200 or less in your home. If you have equity of between $20,200 and $75,000, you can file a state exemption in Connecticut even though you do not qualify for a federal exemption. If you are married and are filing for bankruptcy jointly with your spouse, you may file a federal exemption if you have equity of $40,400 or less and a state exemption for up to $150,000 worth of equity. File your exemption on Schedule C when you file your Chapter 7 bankruptcy. Schedule C requires you to list whether you are claiming a federal or state exemption, the amount of the exemption you are claiming and the full value of your property.
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Tips & Warnings
If you cannot pay your mortgage or do not qualify for a homestead exemption, file a Chapter 13 bankruptcy to enter a structured repayment plan so that you will not lose your house due to foreclosure. You may file for Chapter 13 after you file for Chapter 7. You must make all payments under Chapter 13 in a timely manner.
