Accruing equity in your home over the years may represent your biggest financial investment over the course of your life. For many people, the equity in their home may be worth substantially more than any retirement savings they have.
People are often worried about pursuing Chapter 7 bankruptcy, also known as liquidation bankruptcy, because the courts have the right to seize and liquidate their assets in order to repay creditors prior to the bankruptcy discharge at the end of the process. Having the courts liquidate some or all of the equity in your home could put you in dire financial straits and even leave you at risk of homelessness.
Thankfully, those who qualify for Chapter 7 bankruptcy proceedings have some protection regarding their primary residence or homestead when it comes to the liquidation of their assets in order to repay creditors.
New Hampshire has generous equity exemptions for your home
If you pass the means test and qualify for Chapter 7 bankruptcy in New Hampshire, you can protect certain assets from liquidation through the use of exemptions. While there are federal bankruptcy exemptions, the New Hampshire homestead exemption is more generous, which means that people with substantial equity in their primary homestead residence may benefit more from the state exemption than the federal one.
Using the New Hampshire State exemptions, you can protect up to $120,000 worth of equity as a single person or double that amount if you file bankruptcy jointly with your spouse who also owns the house. Protecting your equity will mean protecting your home, which can give you more stability as you work to rebuild your finances after bankruptcy.
Every situation is unique, so consult with an experienced advocate about yours to learn more.