Bankrupt home owners tend to keep their homes as they have emotional attachment to the property.  They can keep their homes and cannot in some other circumstances.  In this article we will see how bankrupt home owners can keep the home and also why they cannot keep their home under other circumstances. Bankruptcy is a solution to severe financial problems.  But this step should be the last step after considering all other ways to find a right solution by consulting a professional in bankruptcy. There are many solutions for solving the debt crisis and the professional can guide you on how to go about them. You can also do some research about bankruptcy and the various laws and effects that can have on your finances.  In Australia a person remains in bankruptcy for three years which can get extended to 5 or 8 years.  It is a well known fact that bankruptcy can save marriages and lives.

If there is equity in the home and the bankrupt home owner has enough income to cover the property tax, his living expenses and the bankruptcy payments he or she can keep the house even after bankruptcy.  The lender usually agrees to work out a plan to enable the bankrupt home owner to keep the home.  On the other hand may feel that keeping the home involves a lot of expenses and ads to the burden of the repayments.  In this case the home becomes a burden instead of being an asset to the bankrupt home owner. If there are outstanding mortgage payments at the time of filing for bankruptcy, the court issues a stay order so that the lender is prevented from repossessing the property till the stay order is lifted.  Only then can the lender proceed with foreclosure formalities.  If the bankrupt homeowner wants to keep the house after bankruptcy, the attorney initiates a legal procedure to obtain the consent from the lender. The lender cannot collect any dues during bankruptcy.  The lender has to give a letter of consent so that the bankrupt home owner can keep the house provided he agrees to make all the mortgage payments to the lender.  This is possible only if the income, the property value, the amount of payment that is behind and the current debt repayments etc. are proved with proper documentation.  

Some bankrupt home owners may decide to sell the house to avoid filing for bankruptcy. There are real estate companies who specialize in this type of property transactions to enable the home owner to settle his dues quickly.  They even pay in cash and complete the process in a few days.  They offer free consultation through phone or email and keep the information of their clients confidential.  The home owner settles all his debts with the sale proceeds and avoids going bankrupt.  There are other debt consolidation services and debt advice services to save people from losing their homes through various debt relief programs. However if the house has no equity and the payments are far behind and the bankrupt home owner does not earn enough to make all the payments, there is no question of keeping the home after bankruptcy. The bankrupt homeowner has to speak to a bankruptcy lawyer who in turn will speak to the mortgage company to avoid foreclosure.