questions & answers

Question: I am a single mother(one child) and living on a Teacher's salary. I have a mortgage and a considerable amount of credit debt, plus student loans. I can make my house payment but am struggling to make any of the credit payments. Question is: Can I file Bankruptcy ( ch7) and keep my house. None of the debt was secured with my home.

Answer:

If you have less than $150,000 in equity and you keep your mortgage payments current, you may be able to file for chapter 7 and keep your home. Keep in mind that your student loans will not be discharged if you file Chapter 7. You will still need to pay your student loans.

There have been recent changes to the bankruptcy laws.  Make sure that you are indeed eligible to file for Ch7.  (Certain individuals falling within "higher income brackets" are now required to file under Ch13 and are considered ineligible for Ch7.  Additionally, there are new credit counseling requirements for Ch 7.  Make sure you look into those as well. See the before you file section of the Bankruptcy Court webpage.

If you file for Ch7 Bankruptcy and are presented with a reaffirmation agreement by your lender, you may want to consult with an attorney prior to signing any agreement.  It is important for you to review with an attorney (1) whether a reaffirmation agreement is required to keep the home (--- in some circumstances it may be required----)  and (2) whether it is it in your best interests to sign the agreement. 

Online forms for bankruptcy filing in Arizona are available at that Bankruptcy Court forms page. Also, the Bankruptcy Court for the District of Arizona has a self service area. Bankruptcy forms and people who may be able to answer some of your questions are both at the self service area at the court.