The simple answer is that it depends. Whether Florida residents get to keep their homes initially depends on three things. The first is whether a homeowner files Chapter 7 or Chapter 13 bankruptcy. The second and third factors are the amount of equity in the home and whether the filer can afford to make the mortgage loan payments after the bankruptcy.
There are cases in which a Chapter 7 filer gets to keep his or her home. However, the chances tend to increase in a Chapter 13 bankruptcy. This is because the property exemptions are often higher, more flexible and less strict in a debt reorganization bankruptcy (Chapter 13) than they are in a liquidation bankruptcy (Chapter 7).
If the equity in your home — the difference between the home’s value and the loan balance — is above the exemption amount, the trustee could force you to sell your house to pay your creditors. However, since a large number of people owe more on their houses than they are worth, they might be able to keep their houses. The question then becomes whether keeping the home makes economic sense. If you will not be able to afford the mortgage loan payments after the bankruptcy is discharged, it might not be worth keeping, since you could face foreclosure.
For many Florida residents, filing for Chapter 13 bankruptcy provides the best option for keeping the family home. Financial issues can create a substantial amount of stress, and thinking that you could lose your home makes the situation even more difficult to bear. Therefore, it would be beneficial to understand what your options are to obtain a fresh financial start while staying in your home.
Source: FindLaw, “Can I Keep My Home After Filing Bankruptcy?“, Accessed on March 7, 2016