Answered on Jul 15th, 2014 at 8:14 AM
Only $40,000 of home equity is exempt in Oregon, when you do not file as a couple. Therefore, if you have more than $40,000 in equity, it is conceivable that the trustee would take it. The higher the equity, the more likely that you would lose it. You might consider Chapter 13 as an alternative, in which you would be allowed to "pay for" the non-exempt equity for up to 5 years instead of losing the house. You still get the immediate protection of the bankruptcy stay with a 13, but the discharge of debts only occurs if you complete your plan. You are not required to use your disability benefit in a Chapter 13, but you must have some source of steady income to fund the monthly payments. If you reside somewhere other than Oregon, your homestead exemption might be greater, depending on the exemption rules you are required to use. Choosing the right exemptions can be tricky, and only a lawyer can tell you which ones to apply. Anyone else advising you to use a certain set of exemptions is practicing law without a license.