Filing for Chapter 7 bankruptcy is a major financial decision, especially if you're a homeowner. At De Leo Law Firm, LLC, we understand how important your home is to you and your family. If you live in Mandeville or the surrounding areas, knowing how your property may be affected can help you prepare for the process and protect your rights.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a liquidation process where most unsecured debts, like credit cards and medical bills, are discharged. In exchange, the bankruptcy trustee may sell certain non-exempt assets to repay creditors. However, many filers can retain essential property through exemptions.

Will I Lose My Home in Chapter 7?

It depends on several factors:

1. Your Home Equity:
   Louisiana has a homestead exemption that protects up to $35,000 of equity in your primary residence. If your home equity does not exceed this exemption, the trustee cannot sell your house.
2. Mortgage Status:
   If you're current on your mortgage payments and your equity is protected by the homestead exemption, you are more likely to keep your home. If you’re behind on payments, the lender may still pursue foreclosure even during or after your bankruptcy case.
3. Surrendering the Home:
   Some homeowners choose to surrender their property if they owe more than the home is worth or cannot afford the payments. Chapter 7 allows you to walk away from the debt tied to the property without facing further liability.

Other Considerations

• Second Mortgages or Liens:
  Chapter 7 does not remove secondary liens, even if the home is protected under the exemption.
• Intent to Reaffirm:
  You may need to reaffirm the mortgage debt to retain the home. This means continuing your payment obligations after bankruptcy.
• Rental Properties:
  Investment or secondary homes are generally not protected under the Louisiana homestead exemption and are more likely to be sold by the trustee.

Speak with a Louisiana Bankruptcy Attorney

Each bankruptcy case is different. At De Leo Law Firm, LLC, we provide guidance tailored to your financial situation. If you’re considering Chapter 7 in Mandeville or across Louisiana, we’re here to help you understand your options, protect your property, and make informed decisions.