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My house has equity and I am disabled, can I protect it?
12 June 2015

My house has equity and I am disabled, can I protect it?

With house values starting to rise, many homeowners filing for Chapter 7 bankruptcy are finding out that equity actually exists in their home. Unbeknownst to many debtors, the bankruptcy code offers protection to the debtor who wishes to protect the equity in their home. In fact, certain types of conditions also apply which would afford the debtor(s) to protect a greater amount of equity.

One of these conditions is outlined in the Code of Civil Procedure Section 704.730(a)(3)(B), which states in pertinent part that a debtor can protect up to $175,000 of his home equity if the debtor is “physically or mentally disabled who as a result of that disability is unable to engage in substantial gainful employment.”

Typically, most debtors that have been diagnosed with a physical or mental disability and are receiving disability through the US Social Security Administration may qualify for this enhanced exemption.

Bankruptcy planning, especially determining which chapter for relief to file and what exemptions, is difficult enough. These complexities must be properly evaluated by a knowledgeable bankruptcy attorney to avoid having valuable assets taken during your bankruptcy. As a highly skilled bankruptcy attorney, I make it my goal to provide each client dedicated the time and experience to assist clients with their bankruptcy filing.

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