One of the biggest questions that people think about when it becomes clear that they might have to declare bankruptcy is whether or not they'll lose their home. The idea of being homeless, while not applicable to most bankruptcy situations, is certainly a sobering thought. It's important to discuss this topic at length with your bankruptcy attorney. Depending on the type of bankruptcy that you declare, you may be able to keep your home, or your home may be seized. Here are some pros and cons of keeping your home.

Pro: A Place To Live

The obvious benefit of keeping your home after you declare bankruptcy is that you'll continue to have a place to live. This is critical if you have children, as you'll want to provide some sense of normalcy for them — even if your life is experiencing its share of challenges at the moment. While there are certain factors to keep in mind if you want to keep your home — namely, it usually has to be below a certain value — this is generally ideal for people.

Con: Financial Stress Can Continue

If you're at the point of bankruptcy, you've likely endured a lot of financial stress over the last several months or even years. Keeping your house means that you'll need to continue to make mortgage payments on it, and if your funds are a minimum after you declare bankruptcy, you may experience a continuation of the financial stress that you've been living with.

Pro: You Can Rebuild Your Credit

Declaring bankruptcy has a negative impact on your credit rating, so it's important for you to have a method of rebuilding this rating as steadily as possible. One way that you can achieve this goal is to keep your home. As long as you're able to consistently make your mortgage payments each month, you'll be methodically working on building better credit. Of course, you'll also want to make other smart financial decisions, such as staying away from loans that that may struggle to pay off in the short term.

Con: It May Be Beyond Your Means

There's a possibility that you own a home that is a little too much for you in your current financial situation, and keeping it may be difficult. If you struggle to barely pay the mortgage, you may lack the money for the home's upkeep — which can especially be detrimental when it comes time to sell. Instead of keeping your current home, your bankruptcy attorney may advocate downsizing into something that is more affordable.

For more information, talk to a bankruptcy attorney in your area today.

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