Filing for bankruptcy can be a powerful way to get financial relief, but many Mississippi homeowners worry about one major issue: Will I lose my house? The answer depends on the type of bankruptcy you file, the equity in your home, and how current you are on your mortgage payments.

At J. Madison Brooks III, Attorney at Law, we help individuals in Greenville and throughout Mississippi navigate the bankruptcy process while protecting what matters most—including their homes.

Mississippi’s Homestead Exemption

Mississippi offers a generous homestead exemption that can protect up to $75,000 of equity in your primary residence from creditors in bankruptcy. This means:

• If your home equity is below $75,000, your home may be fully protected.
• If your equity exceeds $75,000, you could still keep your home by paying off the excess through a repayment plan.

This exemption only applies if the property is owner-occupied and used as your primary residence.

Chapter 7 Bankruptcy and Your Home

In a Chapter 7 bankruptcy, non-exempt assets can be sold to pay creditors. However, if your home equity is fully protected by the homestead exemption—and you’re current on mortgage payments—you may be able to keep your house.

But if:

• You’re behind on payments, or
• You have significant equity over the exemption amount

...the trustee may decide to sell the home to repay creditors.

Chapter 13 Bankruptcy and Your Home

Chapter 13 bankruptcy is often a better choice for homeowners. It allows you to:

• Catch up on mortgage arrears through a 3- to 5-year repayment plan
• Keep your home, even if you’re behind on payments
• Possibly strip off second mortgages if the home's value doesn’t support them

As long as you stick to the repayment plan and continue making your regular mortgage payments, you can stay in your home.

Get the Right Legal Guidance

Every situation is different. At J. Madison Brooks III, Attorney at Law, we work with clients in Greenville, Mississippi, to help them protect their homes and get a fresh financial start. If you’re considering bankruptcy, it’s important to talk with an attorney who understands the local laws and can guide you through your options.