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Should you surrender your home in your bankruptcy?

If massive debts have forced you into a position to consider bankruptcy, then one of your main concerns may be what will happen with your home in Salem. If you are current on all of your mortgage payments, or you have adequate equity in the property to protect it under New Hampshire’s Homestead Exemption, then you may able to keep your home (the state’s statute’s currently show that exemption amount to be $120,000). However, you may want to first contemplate whether it is a wise decision to keep your home.

Surrendering your home in a bankruptcy may at first seem like a ludicrous idea, yet before you dismiss it, you may want to ask yourself these questions:

  •          Are you underwater with your mortgage?
  •          Can you reasonably afford your monthly mortgage payments?
  •          Do you even want to keep the home?

If you do owe more than your house is currently worth, then surrendering it as part of a Chapter 7 bankruptcy may be a good way to avoid owing your mortgage lender money following a potential sale. If you cannot afford your mortgage payments under your current financial circumstances, then your bankruptcy may only serve to temporarily delay your home’s foreclosure. If moving into a less-expensive home will give you a better chance to get back on your feet financially, or your home is need of repairs that you cannot currently afford, then surrendering it may be something to consider.

To surrender your home as part of your bankruptcy, you simply need to indicate it in your Statement of Intention. While none of the information given above should be considered as a substitute for legal advice, it may help make the difficult decision of what to do with your home during your bankruptcy easier.  

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