Can You Attach Your Home to Bankruptcies?

Chapter 7 Homestead Exemption

• As a condition of your Chapter 7 filing, you must agree to surrender certain assets to the court. These assets are then liquidated and distributed to your creditors. If you own a home, you can protect your interest in its equity value by claiming a homestead exemption. Claiming the homestead exemption prevents the bankruptcy court from forcing the sale of your home to repay your creditors. The amount of the homestead exemption varies by state. Some states allow you to use the federal homestead exemption amount in lieu of state limits. At the time of publication, the federal homestead exemption amount was $21,625.