How to Keep Creditors From Taking Land in a Bankruptcy
- 1). Claim your residence as homestead property in preparing your initial petition for bankruptcy. Identifying your residence as homestead property removes it from the reach of other creditors. The homestead exemption does not extend to any other real estate that you own.
- 2). Identify any land you own for income producing purposes as exempt in your initial bankruptcy petition. Property that is used to generate revenue oftentimes is protected from creditors.
- 3). Enter into a reaffirmation agreement with the mortgage lender that provided the financing on your residence. Through a reaffirmation agreement you create what amounts to a new loan agreement with that creditor. The mortgage lender agrees to continue to business with you into the future provided you make payments on the reaffirmed mortgage loan pursuant to its terms and conditions.
- 4). Negotiate a reaffirmation agreement with the lender who holds a mortgage lien on any income producing real estate you own. As is the case with your residence, a reaffirmation agreement allows you the ability to maintain possession of the real estate and pay off the reaffirmed loan into the future.
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