Up to $200,000 of home equity protected in bankruptcy
Del. Code tit. 10, § 4914(c)(1)
In plain words
In a bankruptcy or state insolvency case, a Delaware debtor can protect up to $200,000 of equity in real property or a manufactured home that is the debtor’s principal residence. Outside bankruptcy, Delaware gives much less protection to a home.
Who is protected
Individual debtors domiciled in Delaware, in bankruptcy or insolvency.
When it applies
- Only in Delaware.
- Only if the home is your primary residence.
- Only if you are in a bankruptcy case.
What you can do
Compare your options
Compare your equity with the $200,000 limit before choosing bankruptcy.
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Our Delaware page explains the whole process step by step, with its sources and free local help.
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Honest limits
- Applies only in bankruptcy or state insolvency, not against ordinary creditors.
- This is general education, not legal advice. Laws change and details depend on your papers and your court; check the current law or ask a lawyer or legal aid.
The law
- State lawBankruptcy exemption for principal residence
Del. Code tit. 10, § 4914(c)(1)
Exact part: (c)(1)
What it says: In bankruptcy, equity in a principal residence is exempt up to $200,000.
Read the official texthttps://delcode.delaware.gov/title10/c049/sc01/index.html
Court cases
- Homeowner wonSame topicBartee v. Tara Colony Homeowners Ass'n
Bartee v. Tara Colony Homeowners Ass'n (In re Bartee), 212 F.3d 277 (5th Cir. 2000)
Chapter 13's anti-modification rule does not protect a junior lienholder whose lien is not supported by any value in the debtor's home
- Homeowner lostSame topicNobelman v. American Savings Bank
Nobelman v. Am. Sav. Bank, 508 U.S. 324 (1993)
a Chapter 13 debtor may not reduce a mortgage secured only by the principal residence to the fair market value of the home
- Partial winSame topicTaggart v. Lorenzen
Taggart v. Lorenzen, 587 U.S. 554 (2019)
a creditor may be held in civil contempt for violating a bankruptcy discharge order when there is no fair ground of doubt that the order barred its conduct
- Homeowner wonSame topicYoung v. Repine (In re Repine)
Young v. Repine (In re Repine), 536 F.3d 512 (5th Cir. 2008)
a creditor who knows of a bankruptcy and keeps pursuing collection willfully violates the automatic stay and may owe the debtor damages and attorney's fees
- Homeowner wonSame topicTill v. SCS Credit Corp.
Till v. SCS Credit Corp., 541 U.S. 465 (2004)
secured claims paid through a Chapter 13 plan may carry a prime-plus formula interest rate rather than the contract rate
- Homeowner lostSame topicCity of Chicago v. Fulton
City of Chicago v. Fulton, 592 U.S. 154 (2021)
merely retaining estate property seized before the bankruptcy filing does not violate the automatic stay under § 362(a)(3)
Related rights
Protect equity in your home with a bankruptcy exemption
11 U.S.C. § 522(b)(1)–(3)
In bankruptcy, you can keep ("exempt") certain property from creditors. For your home, the federal exemption protects equity up to a set dollar amount, but many states make you use the state's own list instead. Some state homestead exemptions are much larger than the federal one; some are smaller.
Read this rightThe automatic stay: filing bankruptcy pauses most collection
11 U.S.C. § 362(a)
When a bankruptcy case is filed, an "automatic stay" goes into effect right away. It generally stops lawsuits, foreclosure steps, and other collection against you and your property, without anyone needing to ask a judge. Creditors who knowingly violate it can owe damages.
Read this rightChapter 13: catch up on missed mortgage payments over time
11 U.S.C. § 1322(b)(5)
In a Chapter 13 bankruptcy, a plan can let you catch up on missed mortgage payments over a reasonable time (often 3 to 5 years) while you keep paying the regular monthly payment. For your main home, you can use this cure until the home is sold at a foreclosure sale held under state law.
Read this rightAfter a discharge, creditors cannot collect the wiped-out debt from you
11 U.S.C. § 524(a)(2)
A bankruptcy discharge wipes out your personal liability for most debts in the case. After that, the law forbids creditors from suing, calling or otherwise trying to collect a discharged debt from you personally. A court can hold a creditor in contempt if there was no fair doubt that its conduct was barred.
Read this right