Will I Lose My House?

Dallas Foreclosure Attorney; Helping You Keep Your House

Fort Worth Chapter 7 & 13 Bankruptcy Lawyer – Dispelling Bankruptcy Myths

Here at Fears Nachawati Law Firm, we know that your home is precious to you. It’s a place where you can be yourself and happily raise your family.

There are some people who contemplate bankruptcy but hesitate to file, due to false rumors that bankruptcy somehow “triggers” the loss of their home. This is a myth. Texas Homestead exemption laws are designed to help homeowners protect the value of their home in Chapter 7 bankruptcy. Furthermore, Chapter 13 bankruptcy helps debtors bring their loan accounts current by allowing them to catch up with mortgage arrears over time.

We find that the majority of our bankruptcy clients are able to keep their primary residence if they are up-to-date with their mortgage payments and/or are financially able to make timely payments in the future.

Chapter 7: Protecting the Equity in Your Home Using Texas Homestead Exemptions

Chapter 7 bankruptcy is often referred to as “liquidation bankruptcy,” in which ordinary personal property is protected, but can also mean that your non-exempt personal property can potentially be liquidated or sold, with the proceeds distributed among your creditors to pay down your debts.

However, in a Chapter 7 Bankruptcy, Texas State law allows you an almost unlimited homestead exemption (details below). This means that as long as you have equity, the value of your home is generally protected up to an unlimited amount (with some restrictions).

You may claim unlimited homestead exemption under the following circumstances:

  • The property is a Texas property and is your primary residence
  • You have been a Texas resident for 24 months prior to filing bankruptcy
  • You filed an “Application for Residence Homestead Exemption” with your county clerk (recorder’s office) before filing for bankruptcy

The Texas homestead exemption allows you to protect the value of your dwelling, but there are acreage limitations: To qualify for the exemption, your property must be contiguous and cannot exceed:

  • 10 Acres – for homesteads in villages, towns, cities and urban areas
  • 100 Acres – for homesteads in rural areas occupied by a single adult
  • 200 Acres – for rural homesteads occupied by a family

Chapter 7: Voluntary Surrender of Your Home if it’s “Under Water”

If you owe more on your home’s principal balance than what your home is worth — you may want to consider voluntarily surrendering your home — especially if don’t have the income to pay your mortgage, or you no longer want the property.

Although you will be voluntarily giving up your home to the bank to remove the lien, the debt itself can be discharged in a Chapter 7 bankruptcy, and you will no longer be legally liable for the debt in the future.

Although it’s painful to walk away from a house, you can begin anew financially, after your debt for the home loan is cancelled, and your unsecured debts are also discharged at the end of Chapter 7 bankruptcy.

Chapter 13 Bankruptcy Can Potentially Save You from Foreclosure

A Fort Worth Chapter 7 & 13 bankruptcy lawyer at Fears Nachawati Law Firm may recommend a Chapter 13 bankruptcy as a viable option to help you keep your primary residence. In a Chapter 13, you may be able to work out an affordable monthly repayment plan to become current with your loan. You would have 36 to 60 months to pay your overdue mortgage bills and get back on track.

Call a Dallas foreclosure attorney at to ask about the Automatic Stay Order, which effectively stops your lender from proceeding with a foreclosure action, even if you are past due with your payments. It goes into effect when you file a personal bankruptcy.