Can I keep my home if I have a mortgage? 

One of the biggest concerns you may have in considering bankruptcy is the possibility of losing your home.

If you are behind on your mortgage payments, you will almost certainly lose your house if you file a Chapter 7 bankruptcy.  Your mortgage lender will ask the bankruptcy court to lift the automatic stay to begin or resume foreclosure proceedings.  In a Chapter 13 bankruptcy, you will not lose your house if you immediately resume making the regular payments called for under your Mortgage or Deed of Trust agreement and you repay your missed mortgage payments through your Chapter 13 plan.

If you are current on your mortgage payments, you will not lose your house to the mortgage company if you file for bankruptcy, as long as you continue to make your mortgage payments.  However, the bankruptcy trustee in a Chapter 7 bankruptcy may take your home depending on the amount of equity you have in the property.  This in turn depends on how much "homestead exemption" you are entitled to claim.

In California, the homestead exemption on real or personal property you occupy, including a mobile home, boat, stock cooperative, community apartment, planned development or condo is as follows:

$50,000 if single and not disabled

$75,000 for families, if no other member has a homestead $150,000 if over 65, blind or disabled, or

$150,000 if 55 or older, single and earn under $15,000, or married and earn under $20,000 and creditors seek to force the sale of your home.

Sale proceeds are exempt for six months after they are received, unless reinvested in another homestead.

If your home equity is too large for you to keep your home in a Chapter 7 case, you may want to consider Chapter 13 instead so that you can develop a plan for repayment without selling the home.