I bought a home as a primary residence for my disabled mom. It’s allowed with conventional mortgages, and her rental assistance covers the mortgage payments. My mom is 100% disabled. If I file for Chapter 7 bankruptcy, will I have to include this home?
Yes, in Chapter 7 bankruptcy, you must list all assets and liabilities, including the home you purchased for your mom. Everything has to be disclosed.
Lian said:
Yes, in Chapter 7 bankruptcy, you must list all assets and liabilities, including the home you purchased for your mom. Everything has to be disclosed.
Correct. Even if the rental assistance pays the mortgage, it still counts as an asset. Talk to a bankruptcy attorney to see if you can exempt the property.
Lian said:
Yes, in Chapter 7 bankruptcy, you must list all assets and liabilities, including the home you purchased for your mom. Everything has to be disclosed.
Failing to disclose the home could lead to serious consequences, like bankruptcy fraud charges. Transparency is key.
The equity in the home will matter. If there’s significant equity, it could be at risk in Chapter 7 unless it’s exempt under state or federal rules.
AdvocateA said:
The equity in the home will matter. If there’s significant equity, it could be at risk in Chapter 7 unless it’s exempt under state or federal rules.
Exactly. Some states have generous homestead exemptions that might protect it, but you’ll need legal advice specific to your situation.
If Chapter 7 doesn’t work because of the home, you could consider Chapter 13. It allows you to keep assets and pay debts over time.
Harley said:
If Chapter 7 doesn’t work because of the home, you could consider Chapter 13. It allows you to keep assets and pay debts over time.
Good point. Chapter 13 might be a better fit if the property isn’t fully protected under Chapter 7.
The rental assistance covering the mortgage might complicate things since it’s technically income. A bankruptcy lawyer can help you sort this out.
Make sure to meet with a local bankruptcy attorney. They can calculate whether the property can be exempted and guide you through the best approach.
Kirby said:
Make sure to meet with a local bankruptcy attorney. They can calculate whether the property can be exempted and guide you through the best approach.
Agreed. An experienced attorney can also explain whether state or federal exemptions apply to your case.