Can You File Bankruptcy and Keep Your House After Such a Disaster?

can you file bankruptcy and keep your house

Things happen.

Sometimes things happen that are out of your control.  Sometimes you did everything perfect and something comes along that wipes out your family finances.

Perhaps it was the sudden loss of a job, a medical emergency, a divorce, or any other one of life’s crazy twists.  Although it’s not for everyone, sometimes you have to turn to the ultimate solution – bankruptcy.

But wait  …. Even when that happens, you don’t have to lose everything.  You worked hard for your home!  And you don’t want to give it up now.

That’s when having someone to turn to who knows if you can you file bankruptcy and keep your house might be worth every penny to have around.


Keeping All Parties Happy:

As far as the family home is concerned, any non-bankrupt spouse may believe that they can claim ownership of their ex-partner’s half of the property. Unfortunately, this can only be made possible if the Trustee in Bankruptcy, a person acting on behalf of the creditors during bankruptcy proceedings, gives their permission. Otherwise, the family home will become property of the creditors.

The same applies for most other matrimonial assets, but whatever happens, should one spouse rather than both declare themselves bankrupt, great care must be taken by everyone to avoid further complications. Anyone with a family home to speak of should at least be able to stave off bankruptcy for a short while at least.


Mixed Blessings for Non-Homeowners:

Falling out among families is fairly commonplace, but when things begin to turn a little nastier than normal, there could be serious consequences for all involved. A major cause of family breakdown is financial strife, which can exacerbate any tension between spouses. If, say, one spouse has been far less responsible with their money than the other, then there are yet more complications.

Should one spouse be left with no choice but to declare themselves bankrupt, the focus will inevitably shift towards matrimonial assets shared by the divorcees and who can claim ownership of them. The non-bankrupt spouse may believe that they’re able to claim ownership of anything their ex-partner has, especially the family home, but is this may not be the case.

If your a divorcee who is also non-homeowner, then you are likely to see the bankruptcy process be a little smoother.  Divorcee’s have fewer assets which carry significant financial value such as a family home to determine who is entitled to them. However, as non-homeowners are likely to earn less than homeowners, they may find that bankruptcy is more likely.

Indeed, 77% of people who file for bankruptcy are non-homeowners. This suggests that their options when it comes to satisfying creditors are more limited, as they have less to give them. Despite that, both home-owning and non-home-owning couples on the brink of divorce have plenty of work to do when dividing up assets and repaying debts.


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  1. says


    I hadn’t considered the impact of bankruptcy in a marriage, failing or not, before. My wife and I got a prenup before getting married, primarily to keep pre-marriage assets separate and limit spousal support in a worst case scenario. However, it has no provisions for bankruptcy, and I didn’t see any consideration of it when doing my prenuptial research.

    Here’s hoping we never have to deal with this.
    Jack @ Enwealthen recently posted..Want to Save $100,000 on Your Mortgage? Improve your Credit ScoreMy Profile

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