Is Having Equity in Property a Problem in Bankruptcy?
Can having equity in a property be a problem when it comes to filing a bankruptcy case? Perhaps you are struggling with debt right now that is difficult to pay from your income and other earnings. Perhaps you have delinquent accounts and ongoing payments that stretch your budget, or maybe there are lawsuits coming against you or unpaid tax obligations. These debts worry you, but perhaps you also own property, and you know that your property, whether it is a house or car or that antique clock from grandma, has equity in it. What will happen to your property if you file bankruptcy? One of the most frequent questions we are asked at Sasser Law Firm is whether a person will lose property in a bankruptcy case?
Particularly in the markets, we are experiencing right now, with home prices going up over 20% in some places in eastern North Carolina and used car prices increasing over 30% in the Raleigh and Triangle area, people are finding that they have more equity in their property than what they realized. The answer as far as bankruptcy is concerned, is that, yes, you can still file a bankruptcy case even when you have equity in the property.
There are two types of bankruptcy cases. Chapter 7 bankruptcy is often referred to as “liquidation” bankruptcy, and a person might lose assets in some Chapter 7 cases when there is equity in property above what can be protected through claiming exemptions on that property. Consequently, most individuals with equity in a property will want to consider filing a Chapter 13 bankruptcy case. In Chapter 13 bankruptcy, individuals do not lose assets to liquidation. Instead, there is an analysis performed to calculate the amount of equity that a person has in a property, and the amount of equity might be a factor in how much a person must pay back to creditors over the course of time in a Chapter 13 plan. We would enjoy helping you with that analysis to evaluate the amount of equity you have in a property and discuss with you how a bankruptcy case might still be very helpful to deal with your debts while protecting your assets and the equity in your property.
Give us a call at Sasser Law Firm at 919-319-7400. We offer free consultations either over the phone or in-person at our office. We can review the types of property that you own, analyze the amount of equity you have in that property, and together construct a bankruptcy case that may be extremely helpful to your current financial circumstances.
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.