Palatka, FL Bankruptcy Law Firms & Lawyers

First, keep in mind that if you repay debts owed to "insiders", e.g. family members or friends, within the one year preceding a Chapter 7 bankruptcy filing, the bankruptcy trustee can bring an action to recover the money that was paid to those creditors. The bankruptcy code is designed to prevent exactly what you are proposing to do - that is repay your family members to the detriment of other creditors. With that in mind, the most important question is how much equity there is in your home. Depending on what county in New York that you reside in, your homestead exemption is between $75,000 and $150,000. If the house is jointly owned, e.g. with your spouse, then the exemption effectively doubles. If the equity in your home is within the homestead exemption limitations, you could file a Chapter 7 bankruptcy, protect your home, and then pay whomever you wish when you sell the house after the bankruptcy case is closed. Keep in mind that there are many other variables that will determine if you can file for a Chapter 7 bankruptcy. You should speak with an experienced bankruptcy attorney before taking any action.

Do not reaffirm your mortgage. Your personal liability on the loan is discharged. They still have their security interest. You might be able to refinance the property after 3 years.