Will I Lose My House If I File Bankruptcy?

I am frequently asked by people who are thinking of filing bankruptcy, “Will I lose my house if I file bankruptcy?” The fear of losing everything in bankruptcy is very real.

Fortunately, in Kansas the protection our law has for your home is in our state constitution and statutes. That is quite different from other states, Missouri, for example.

If you are entitled to claim the Kansas homestead exemption, it is unlikely you will lose your home for filing bankruptcy. Most of my clients who lose their homes, do so because they can’t afford to pay the mortgage payments and real estate taxes. Bankruptcy is not what causes people to lose their homes in Kansas usually.

There are some situations, which are rare, fortunately, when the bankruptcy trustee might be able to attack your homestead–the reasons are too complicated for a general information blog. Discuss the history of your home ownership with your attorney to put your mind at ease. Your attorney can analyze your circumstances and advise you of your rights so you can quit worrying.

10% Home Mortgages Under Water

Here is a scary statistic for 2007 being reported by ABC News: 10% of American homeowners owe more money on their house than the house is worth. That figure has doubled from 5% in 2006.

For homes purchased in the past two years, the figure shoots up to an alarming 30%, according to Reuters. These are the highest numbers of homes under water since the Great Depression of 1929.

Eight million families are in danger of losing their homes due to mortgages that are greater than the value of the homes. See what fellow blogger, Gene Melchionne, has to say on the Mortgage Law Network about what this means for all Americans, particularly retirement funds.

Attorney General Six Gives Foreclosure Advice – Get Attorney, Learn Options

Kansas Attorney General Stephen N. Six issued the following statement on home mortgage foreclosure this week, urging people facing foreclosure to seek help from an attorney.

Home foreclosure is a growing problem in Kansas and across the nation. Mortgage fraud and subprime lending have left many homeowners stuck with home loans they can no longer afford.

My office recently convened a task force to investigate this problem. Consumer advocates met with representatives from lending and real estate industries to determine ways we can stem the tide of home foreclosure in Kansas. [Read more…]

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