Full question:
I will be losing my job in August and am wondering if I have to file bankruptcy, will I lose my house? I owe more then the house is appraised at now than when I bought it.
- Category: Bankruptcy
- Date:
- State: Rhode Island
Answer:
In Rhode Island, you can choose between federal or state bankruptcy exemptions. Under federal law, up to $16,500 of real property may be exempt from creditors. State law allows for a homestead exemption of up to $300,000 for your principal residence, but this does not apply to purchase money mortgages and has other exceptions.
The Rhode Island statute (R.I. Gen. Laws § 9-26-4.1) states that the homestead exemption is automatic and does not require filing a declaration. This exemption protects your home from being sold to pay debts, except in specific cases, including:
- Taxes, sewer, and water liens
- Debts incurred before acquiring the homestead
- Debts from purchasing the home
- Family court orders for support
- Ground rent for land not owned by the homeowner
- Medical assistance debts to the state
- Debts to federally insured institutions
In summary, while you may have some protections, if you owe more on your mortgage than your home is worth and file for bankruptcy, the outcome can depend on your specific situation and the type of debts you have.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.