Do I have to move if I file bankruptcy?

Most people’s largest purchase is their house. Keeping that home is also the most commonly cited reason that people file bankruptcy and if you go in to the bankruptcy process blind, you risk losing that home and the equity in it.

If you own your home you may be wondering what will happen to your house if/when you file bankruptcy.

First consider whether you own or rent your house. The distinction will be important. Either way you have some protections but you may have far greater protections if you own or are purchasing your home. In order to help you plan an appropriate strategy, your bankruptcy lawyer will need to know the relevant facts right away.

Second, you should consider whether you are currently behind on your mortgage/rent payments or whether you are current on those payments. The difference can dictate what type of bankruptcy proceeding will be useful to you. It could even suggest whether you have to file right away or whether you can hold off for a time.

If you are in Texas, where our firm does the majority of its work, the state laws protecting your “homestead” are very strong but regardless of your current location there are some protections available and even if your state laws are “weaker,” federal law might be able to protect you.

Ultimately, if your primary goal is to hold on to that house because it is your dream home, because your kids grew up there, or for any other reason, you should discuss your options with a qualified bankruptcy attorney. If you specifically state that as your goal, and transparently disclose any other financial problems that you might have, that attorney should be able to adequately inform you of your rights and outline the best way to use those rights to achieve your goals.