How to Keep Your Home During Bankruptcy in Maryland
Facing bankruptcy can be an overwhelming experience, especially when it comes to securing your home. If you reside in Maryland and are concerned about losing your property during bankruptcy proceedings, it is essential to understand the legal options available to you. Here’s how to keep your home during bankruptcy in Maryland.
1. Understand the Types of Bankruptcy
In Maryland, individuals can file for Chapter 7 or Chapter 13 bankruptcy. Each type of bankruptcy has different implications for your home.
Chapter 7 bankruptcy aims to eliminate most unsecured debts and may require you to liquidate some assets, which could include your home unless you qualify for exemptions. On the other hand, Chapter 13 bankruptcy is a reorganization plan, allowing you to keep your home while repaying your debts over three to five years.
2. Utilize Maryland’s Homestead Exemption
Maryland offers a homestead exemption that protects a portion of your home’s equity from creditors during bankruptcy. As of 2023, the exemption is capped at $25,150 for individuals and $50,300 for married couples filing jointly. This means if your home equity is below these amounts, you may be able to keep your property. It’s crucial to accurately assess your home’s equity to understand your standing.
3. File Chapter 13 Bankruptcy
If you want to keep your home and are behind on mortgage payments, Chapter 13 bankruptcy can be a viable option. This type of bankruptcy allows you to create a repayment plan to catch up on missed payments while avoiding foreclosure. By filing Chapter 13, you can protect your home from creditors and work towards reducing your debt burden.
4. Stay Current on Mortgage Payments
Even during bankruptcy proceedings, staying current on your mortgage payments is vital. As long as you continue making your payments, you may avoid foreclosure. If you’re experiencing temporary financial difficulties, communicate with your lender as they might offer solutions such as forbearance or loan modification options.
5. Consider a Reaffirmation Agreement
In Chapter 7 bankruptcy, you have the option to reaffirm your mortgage. A reaffirmation agreement is a contract between you and your lender in which you agree to continue paying your mortgage despite the bankruptcy. By reaffirming, you maintain your obligation to your mortgage, thus keeping your home and potentially improving your credit after bankruptcy.
6. Seek Assistance from a Bankruptcy Attorney
Navigating bankruptcy laws can be complicated, and each situation is unique. Consulting with a knowledgeable bankruptcy attorney can provide you with tailored advice and help you understand all your options. They can assist you in preparing your bankruptcy petition, filing the appropriate documents, and representing you during proceedings.
7. Explore Government Programs
Maryland offers various assistance programs to help homeowners facing financial hardship. Programs like the Maryland Homeowner Assistance Fund may provide financial aid for those at risk of losing their homes. Researching these resources can offer additional support during difficult times.
Conclusion
Keeping your home during bankruptcy in Maryland is achievable with the right strategies and knowledge. Whether through utilizing exemptions, filing Chapter 13, or seeking legal advice, understanding your options is key. It’s crucial to act quickly and make informed decisions to safeguard your home and financial future.