Can Bankruptcy Take Your House in Florida? Understanding Your Rights

Written By: Attorney Robert Stiberman | Bankruptcy Updated March 23, 2023

If you’re struggling to pay your bills in Florida, you may be considering filing for bankruptcy. However, you may also be worried that doing so could mean losing your home. While bankruptcy can be a complex process, it’s important to understand your rights and options before making any decisions. In this article, we’ll explore the question of whether bankruptcy can take your house in Florida.

Can Bankruptcy Take Your House in Florida?

The short answer is: it depends. Bankruptcy law can be complicated, and the answer to this question will vary depending on a number of factors. Here are some of the key things to keep in mind:

Chapter 7 Bankruptcy:

Chapter 7 bankruptcy is sometimes called “liquidation” bankruptcy. This is because some of your assets may be sold to help pay off your debts. However, in Florida, your primary residence may be protected under the homestead exemption. This means that if you own and have lived in your home for at least 1,215 days (or just over three years) immediately preceding your bankruptcy filing, it is generally exempt from the bankruptcy estate. In other words, your house cannot be sold to pay off your debts in most cases. Read our article Florida exemptions for more detail:  Bankruptcy Exemptions in Florida: What Exemptions Are Available?

Chapter 13 Bankruptcy:

Chapter 13 bankruptcy is different from Chapter 7 in that it involves creating a repayment plan to pay off your debts over a period of three to five years. While your home may not be sold or liquidated by the chapter 13 trustee in a Chapter 13 bankruptcy, you will need to continue making your mortgage payments to keep it. If you fall behind on your mortgage payments during a Chapter 13 bankruptcy, you may risk losing your home.

Other Considerations:

There are a few other things to keep in mind when considering whether bankruptcy can take your house in Florida. For example:

• If you are behind on your mortgage payments and facing foreclosure, filing for bankruptcy may be able to help you save your home.
• If you have a significant amount of equity in your home, you may want to speak with a bankruptcy attorney about your options to ensure you can fully protect it.

Frequently Asked Questions:

Q: Can I keep my house if I file for bankruptcy in Florida?
A: In most cases, yes. As long as you meet the requirements for the homestead exemption, your primary residence is generally exempt from the bankruptcy estate.

Q: What happens to my second mortgage or home equity loan in bankruptcy?
A: These debts may be discharged in bankruptcy if your primary mortgage exceeds the current market value of your home. This is known as “lien stripping” and may allow you to keep your home while eliminating the second mortgage or home equity loan. 

Q: Can filing for bankruptcy stop a foreclosure in Florida?
A: Yes, filing for bankruptcy can trigger an automatic stay that will temporarily stop the foreclosure process.

Conclusion:

If you’re considering filing for bankruptcy in Florida, it’s important to understand how it could impact your home. In most cases, your primary residence is protected under the homestead exemption, but there are other factors to consider as well. Working with an experienced bankruptcy attorney can help you navigate this complex process and make informed decisions about your financial future.

Written By:

Attorney Robert Stiberman

Robert is an experienced bankruptcy attorney with more than 13 years of experience in consumer Chapter 7 and Chapter 13 cases. Robert regularly practices in the Miami, Fort Lauderdale, and West Palm Beach Divisions of th... Read More