Filing for bankruptcy is often a difficult decision, and one of the biggest concerns for most people is whether they can keep their home. The good news is that, depending on the type of bankruptcy you file and the equity in your home, you may be able to keep your house in Oklahoma. Here’s what you need to know about how bankruptcy affects homeownership.

The Role of Exemptions in Bankruptcy

In bankruptcy, exemptions determine what property you can keep. Oklahoma has one of the most generous homestead exemptions in the country.

You can generally keep your primary residence, regardless of its value, as long as it is on 160 acres or less in rural areas or one acre or less in city limits. The exemption applies only to your primary residence—not vacation homes, rental properties, or investment real estate.

Chapter 7 Bankruptcy and Your Home

In a Chapter 7 bankruptcy, the court appoints a trustee who may sell non-exempt property to pay creditors. Because of Oklahoma’s strong homestead exemption, most homeowners who are current on their mortgage can keep their house.

However, if you are behind on your mortgage, Chapter 7 does not give you a way to catch up on payments. Additionally, if your home is subject to a foreclosure action, bankruptcy may only offer a temporary delay.

Chapter 13 Bankruptcy and Your Home

A Chapter 13 bankruptcy works differently. Instead of liquidating assets, you create a repayment plan over three to five years. Chapter 13 can help if:

• You are behind on your mortgage but want to keep your home.
• You have too much equity to be fully protected under other circumstances (though in Oklahoma, this is rarely an issue for primary residences).
• You want to stop a foreclosure and catch up on past-due payments.

By making regular plan payments and staying current on your mortgage, you can keep your house.

When You Might Lose Your Home

Even with Oklahoma’s generous exemptions, you could lose your home if:

• You stop making mortgage payments and cannot work out a repayment plan.
• The property is not your primary residence.
• You have liens or second mortgages that cannot be resolved through bankruptcy.

Should You Keep Your House in Bankruptcy?

Sometimes, people choose to surrender their home in bankruptcy because the mortgage is unaffordable or the property is worth less than what is owed. Bankruptcy gives you the option to walk away without owing additional money if you decide to surrender your home.

OKC Bankruptcy Attorneys

If you’re considering bankruptcy, understanding how exemptions work and what options you have is crucial. If you’re considering filing for Chapter 7 or Chapter 13 bankruptcy, our bankruptcy team at OKC Attorneys can help. Call us today at 405-367-8710 or ask a question online.