Don’t Risk Losing Your Home in a Chapter 7 Bankruptcy

In the past, an eligible debtor did not risk losing a home in a Chapter 7 bankruptcy if the fair market value of the home was less than the debt encumbering it. This is no longer certain. Some Chapter 7 trustees in Utah have attempted to sell over-encumbered homes depriving debtor’s of a place to live while attempting to avoid paying debtors their homestead exemptions. Before filing a Chapter 7 case, homeowners should consult an experienced bankruptcy attorney to discuss the status of the evolving law governing this risk.