What happens to my house if I file for bankruptcy?
May 11, 2024 | 40,00 EUR | answered by Katja Winterberg
Dear Bankruptcy Lawyer,
My name is Clara Wagner and I am currently facing a difficult financial situation. Due to job-related circumstances and unforeseen expenses, I am unfortunately no longer able to pay my monthly bills. I have tried to adjust my budget and reduce my expenses, but it simply is not enough to pay off my debts.
In this context, I have been considering filing for bankruptcy to start fresh and settle my debts. However, I am very concerned about my house, which I bought a few years ago. I wonder what will happen to my house if I file for bankruptcy. Will I be forced to sell it or could it be foreclosed upon?
My house is very important to me, as it is not only my home but also an investment for the future. I definitely want to avoid losing my home. Are there ways to protect my house if I file for bankruptcy? Or are there alternative solutions to settle my debts without jeopardizing my house?
I would greatly appreciate it if you could help me clarify these questions and show me possible options to protect my house. I look forward to your professional advice and support during this difficult time.
Sincerely,
Clara Wagner
Dear Mrs. Wagner,
Thank you for your inquiry regarding your financial situation and the possibility of filing for bankruptcy. It is understandable that you are concerned about your house and want to know what will happen to your property if you file for bankruptcy. I am happy to explain to you the legal options and possibilities regarding the protection of your house during the bankruptcy process.
When filing for bankruptcy, there are essentially two different types of procedures: regular bankruptcy and consumer bankruptcy. In consumer bankruptcy, there is the possibility to go through a so-called "good behavior period" of six years, during which you try to repay your debts. During this time, your assets will be used to satisfy the creditors. However, there are ways to protect your house during this period.
If your house has a reasonable and adequate value and is essential for your livelihood, you can apply for an exception within the framework of consumer bankruptcy. This means that your house does not have to be foreclosed or sold as long as it serves as suitable living space for you and your family.
It is important that you disclose all relevant information about your house and financial status so that your bankruptcy trustee can find the best possible solution for you. There is also the possibility to reach an out-of-court settlement with your creditors to settle your debts and retain your house.
It is advisable to seek advice from a specialist lawyer in bankruptcy law early on to assess your individual situation and explore the best ways to protect your house. Together, we can find solutions to improve your financial situation and enable a fresh start without jeopardizing your home.
I am here to clarify any further questions and support you during this difficult time. Please do not hesitate to contact me to schedule a consultation. I am here to professionally and competently advise you.
Warm regards,
Katja Winterberg
Specialist lawyer in bankruptcy law
