Just finished going over my mortgage agreement, looking for trouble, I guess. Well I did find one thing of major concern right at the end. Evidently I signed a waiver from the homestead exemptions? Didn't know what that even meant til today. Am I totally screwed now? I can't use the exemptions for the bankruptcy to help keep my house? This just keeps getting worse....
Homestead exemptions are set by state law. There are actually two issues I believe. In some states (Florida and Texas for example) creditors can't use a judgment to foreclose on one's homestead. There are also exemptions for home equity set for BK that govern how much of one's home equity is excluded from the BK estate (that may be unlimited in certain states like FL and TX if residency requirements have been met).
I'm more familiar with TX, because I lived there. TX has one of the strongest homestead provisions, but purchase money mortgages are exempt and can foreclose unless blocked by BK. So the mortgage taken out to buy a home can foreclose, but if you refinance the lender can't, and neither can judgment creditors.
You'd need to ask a lawyer in your state whether such a "waiver" is legal.
To tell the truth, with the amount of paperwork you're given to sign, no matter how closely I look, I would have probably missed that at the end. I wouldn't have even known what it meant, anyway. Most likely they sped right past that part. And at that point, BK wasn't in my thoughts. From what I have ready, it seems like it pertains more to foreclosure than bankruptcy. I'm current with my mortgage and plan to keep it that way. It's not going to stop me from filing, but dependant on what the attorney says, I may end up having to reaffirm. But better to find out now than at the creditors meeting.