Palos Park Bankruptcy Attorney Describes Whether Or Not Someone Will...

Will I lose my house or my car is one of the most important questions people want to know when they come in to see a bankruptcy attorney.  And really I think it should be broken down into a two-pronged analysis. 

The first is whether there is any equity in your house or your car.  What equity means is whether you owe less on your house or car then the house or car is worth.  Let’s say you have a $100,000 mortgage and your house is worth $200,000.  You then have $100,000 in equity.  

Like discussed before, when you are filing Chapter 7 bankruptcy, you are saying to the court I really have no money to pay my creditors back anything.  But if you have significant equity in your house or your car, the bankruptcy court will likely take that property, sell it and pay back your creditors.  But if you do not have any equity in your house or your car, then the bankruptcy court will not be interested in taking that property, selling it and paying back to your creditors. 

The second analysis is whether or not you can afford to make the payment going forward.  Though the bankruptcy will not make you lose your house or your car, you still need to make the payment going forward which means that if you have a $500 a month car payment, you need to be able to make that going forward in order to keep the car.  You will not lose your car in Chapter 7 bankruptcy in most instances.