What will happen to my home if I file for Bankruptcy?
Typically, you will not lose your home during your bankruptcy case as long as your equity in the property is fully exempt. Every state allows a debtor to claim property as exempt from creditors as long as that property has not been pledged as collateral to allow every person to retain certain basic necessities free from creditors.
According to the Oklahoma Bar Association, residential property that may be claimed as exempt under Oklahoma law includes:
- A homestead, regardless of value, not exceeding one acre, if located in a city, town or village, or 160 acres, regardless of value, if located outside a city, town or village. The homestead must be the debtor’s principal residence and may be limited to $5,000 in value if located within a city, town or village and is partially used for business purposes.
- A mobile home that is the debtor’s principal residence.
If you are facing bankruptcy and want to sell your home to pay off debts, you are able to do so with court approval. You are also free to sell your home after the bankruptcy case is completed.