Protect Your Home During a Financial Reset

In tough financial times, Chapter 7 bankruptcy can offer a fresh start. It’s like hitting the reset button on your finances. But here’s the thing: it can also mean giving up some of your assets, including your home. If you’re drowning in debt and worried about losing your home, our Monroe Chapter 7 bankruptcy attorney can help you approach this situation and keep your most precious asset safe.

Do not lose hope if you’re worried about losing your house on top of everything else. In some cases, you can keep your house even if you file for Chapter 7 bankruptcy. It all depends on a few things, like how much your home is worth and the rules in your state.

Quick Summary:

  • Chapter 7 bankruptcy is a legal process allowing individuals overwhelmed by debt to eliminate most or all their debts by liquidating assets, providing them with a fresh start financially.
  • Filing for Chapter 7 bankruptcy offers the benefits of eliminating most or all their debts, protection from creditors through an automatic stay, retention of certain assets through exemptions, and relief from the obligation of creating a repayment plan.
  • In Chapter 7 bankruptcy, individuals may be able to keep their homes by leveraging exemptions and negotiating with creditors. However, outcomes depend on factors such as equity, current mortgage payments, and state laws.
  • If you can’t keep your house in Chapter 7 bankruptcy, you might consider selling it, negotiating with your lender, exploring loan modification programs, or even filing for Chapter 13 bankruptcy as an alternative.

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a legal way for people struggling with money to get help. It’s like a fresh start when you can’t pay your debts and bills anymore. It lets you wipe out most of your debts, giving you a clean slate.

When you file for Chapter 7 bankruptcy, you’re telling the court you can’t manage your debts. The court then looks at what you owe and decides if you can get rid of most or all of it. However, Chapter 7 bankruptcy also means you might need to give up some things you own to pay off your debts. That could include things like your car, belongings, and sometimes even your home.

What are the Benefits of Filing Chapter 7 Bankruptcy?

Filing for Chapter 7 bankruptcy offers several benefits for individuals struggling with overwhelming debt. Here are some of the key advantages:

Getting Rid of Most or All Your Debts

One of the biggest benefits of filing for Chapter 7 bankruptcy is that it can wipe away most or even all your debts. That means you won’t have to worry about them anymore, giving you a fresh start with your finances.

Protection from Creditors

When you file for Chapter 7 bankruptcy, something called an “automatic stay” goes into effect. That stops creditors from bothering you or trying to collect money from you. It gives you some breathing room to figure things out without the constant stress of dealing with creditors.

Keeping Some of Your Stuff

While you might have to give up some things you own to pay off your debts, you get to keep some crucial stuff. These are called exemptions and include things like your clothes, furniture, and even your car in some cases.

No Repayment Plan

Unlike some other types of bankruptcy, like Chapter 13, Chapter 7 bankruptcy doesn’t require you to come up with a repayment plan. Once your debts are wiped away, you’re free from them. You don’t have to make any more payments.

Is There a Way to Keep My House in Chapter 7 Bankruptcy?

In Chapter 7 bankruptcy, understanding what you get to keep and what might be taken away is essential. Don’t worry, bankruptcy isn’t about taking everything you own. There are laws to protect some of your belongings (exemptions).

Many people can keep their homes in Chapter 7 bankruptcy. Here are some of the ways:

Homestead Exemption

The homestead exemption is like a shield that protects your home from being taken away to pay off certain debts. It’s a way to help homeowners keep their primary residence safe during tough financial times.

The homestead exemption is automatically included under Louisiana Chapter 7 bankruptcy. This exemption protects the equity in your home and lands up to $35,000 (although that varies according to whether you live in the city or outside of metropolitan zones). 

To qualify for the homestead exemption, you must own the property and use it as your primary residence. That means you live in the home for most of the year.


If facing financial hardship and considering bankruptcy, equity plays a role in determining if you can keep your house. Equity is how much your home is worth minus how much you owe on your mortgage. If you don’t have much equity in your home, there’s less chance the court will sell it in Chapter 7 bankruptcy.

Mortgage Payments

Your mortgage payment is the money you pay each month to your lender to pay off your home loan. If you’re up to date on your mortgage payments when you file for Chapter 7 bankruptcy, you have a better chance of keeping your house. Being current means you’ve paid all your payments on time without being behind.

It can be more complicated if you’re behind on your mortgage payments. The court might allow you to catch up on missed payments over time or work out a plan with your lender to keep your house.

What are the Alternatives If I Can’t Keep My House in Chapter 7 Bankruptcy?

Facing the possibility of losing your home in Chapter 7 bankruptcy can be overwhelming, but there are alternatives to consider if keeping your house isn’t possible. Let’s explore the other options below:

Sell Your Home

If you can’t afford to keep up with your mortgage payments or if the value of your house is less than what you owe, selling it might be the best choice. Selling your home allows you to pay off your mortgage and potentially have some money left to start fresh.

Negotiate with Your Lender

Sometimes, lenders are willing to work with homeowners to find a solution that allows them to keep their homes. You could try negotiating with your lender to modify your loan terms, lower your monthly payments, or catch up on missed payments through a repayment plan.

Explore Loan Modification Programs

Government programs and loan modification may help you keep your home. These programs can lower your interest rate, extend your loan term, or reduce your monthly payments to make them more manageable.

Consider Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a different bankruptcy type that allows you to create a repayment plan to catch up on missed mortgage payments and keep your home. This option may be suitable if you have a steady income and want to avoid foreclosure.

How Our Louisiana Chapter 7 Bankruptcy Attorney Can Help You Keep Your House in Bankruptcy

While keeping your house in Chapter 7 bankruptcy can be challenging, it’s not impossible. Understanding your options and seeking guidance from our Monroe Chapter 7 bankruptcy attorney at E. Orum Young Law, The Bankruptcy Specialist, are key steps to take if you want to keep your home.

Facing the possibility of losing your house in a Chapter 7 bankruptcy can be scary, but working with our bankruptcy law firm can make a big difference. We will evaluate your assets and determine which exemptions apply to protect your home. We will provide legal guidance tailored to your specific situation, explaining your options and helping you make informed decisions.

If you’re facing financial difficulties and want to learn more about how you can keep your house in Chapter 7 bankruptcy, contact us today for a free case review. Let us help you find a solution and guide you toward a brighter financial future.