Let’s get the answer out of the way right at the top. Yes, you can probably keep your home if you file bankruptcy in Wisconsin.
Keeping a home is the primary concern for many of my clients. After all, it’s likely the most expensive asset they own. And moving can be a real pain. As I tell them, I have never had a client lose a house that they wanted to keep. Here are a few scenarios that my clients and I commonly encounter:
Equity in the house
House value – Balance owed on all mortgages = Equity. Because of the exemptions available in Wisconsin, a bankruptcy filer can keep the house as long as he/she has less than $75,000 of equity in the house ($150,000 for a married couple). Most of my clients have far less than $75,000 of equity in their homes. If you have more than $75,000 and file bankruptcy, you can still keep your house by paying the excess over $75,000 into your Chapter 13 plan for 36-60 months.
Current on the mortgage payments
Clients who are current on their mortgage payments can keep their homes in either Chapter 7 or Chapter 13 by simply continuing to make the mortgage payments. The bank doesn’t want your house, it wants your money. As long as you keep making your payments, everyone will be happy.
Behind on the mortgage payments
Clients who are behind on their mortgage payments can also keep their homes in bankruptcy. Chapter 7 filers may need to get current in a couple of months, but Chapter 13 filers can pay back the mortgage arrears over 36-60 months through the Chapter 13 plan while also starting to make the regular mortgage payments directly to the bank. Chapter 13 can save your house even if a foreclosure has been filed.
If you have a situation that isn’t covered, you can discuss it with your attorney. But the important takeaway from this post is that you can probably keep your house if you file bankruptcy in Wisconsin. Whether you SHOULD keep it is another question.