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KY Chapter 7 Asset Case Question

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    KY Chapter 7 Asset Case Question

    First, I do apologize for the long-winded nature of this question and I do hope that I describe everything correctly here. If any further info is necessary, I'll gladly provide it.

    I have filed a Chapter 7 in the state of Kentucky. I had my creditors meeting on the 6th of this month. My home was inherited from my grandparents. It's 19 lots (which amount to less than an acre, if that) and a single-story 2 bedroom 1 bath house that the PVA value of is $30,000. I am part owner of this house and property with my mother and only $15,000 of the $30,000 was declared as belonging to me. There aren't any liens or mortgages on the house. The house isn't much to talk about as it isn't completely finished and what is finished needs a lot of work. But, it keeps my mother and I out of the weather.

    At the meeting with the trustee, he seemed confused about the status of my home. Both I and my attorney tried to explain that this property was part of a development area that was formed in the county where I live a long while back; a development area that didn't pan out. The trustee still seemed confused by the use of the word "lots". He declared my case "initially an asset case". I called my attorney's office that afternoon and was told that I shouldn't worry about my house as it should fall under homestead.

    This past Wednesday, I received paperwork that was sent to my 4 creditors stating my case has assets and they have 90 days to file claims. I was sued by one of my creditors so I can't imagine them not wanting to jump on this and file a claim. I'm not sure about the other three. The total amount of my debts is a few dollars over $34,000.

    Has anyone had any experience with a case like this in Kentucky? How worried do I have to be about losing my home? Do I have any options to keep this from happening if I am in danger of losing it? Will the homestead exemption in Kentucky save the house for me even though the trustee has already classified the case as being "initially an asset case"? I really feel this is a mistake on the trustee's part for being quick to classify the house as an asset rather than take five minutes to work out the details. My mother filed bankruptcy two years ago and had the exact same house and lots (her half of it) listed on her BR filing and her trustee (a different one than mine) didn't give it a second thought and classified her as "no assets".

    I have been looking for information on the Internet all weekend and haven't found anything until stumbling across this forum. I haven't been able to eat, sleep or concentrate on anything since receiving that paperwork. I honestly don't think that mentally and emotionally I can make it to Monday to get a hold of my attorney to find out more about this. If I lose this house I literally will be living out of my mother's car as will she. We have nowhere else to go so I am understandably worried. I am unemployed and have zero income of any kind so there is no way we can come up with $15,000 to buy the house back from the trustee if he chooses to take it. If I had $15,000 available to me I wouldn't be in this situation to begin with!

    As my screen name says, I am literally at my wits end here and I need some kind of peace of mind, good or bad, before I go absolutely mad before Monday. I need to have some idea where I stand so I can either decide to give up altogether or regroup and forge ahead.

    #2
    I suspect someone from Ky will respond but, in the mean time, here is my assessment assuming you have properly claimed the Ky homestead exemption (if you are allowed a Federal exemption and used it the following is irrelevant):

    Total property value (no liens): $30k
    Value of your ½ interest assuming title is joint with mom: $15k
    The amount of your State's homestead exemption plus the wild card: $6k
    Value to the bk estate after deducting the homestead and w/out the consideration of the cost of sale: $9k

    So, it appears that there is an asset that the Trustee can take worth $9k hence the reason for the notice to creditors to file claims. The Trustee is going to try to squeeze you for some $ by threatening to sell the property (subject to the co-owner's interest). You will most likely have to pay something based upon a settlement with the Trustee. He does not want to sell the home but he does want to line his pocket with a few bucks.

    Des.

    Comment


      #3
      Thanks for the quick info.

      I was afraid of that. I found the information about the $5,000 plus $1,000 wild card on the state statues.

      Would I be better off pulling out of the bankruptcy, selling or giving the house to my mother completely and then just trying my luck with my creditors? There's no way I can come up with $9,000.

      Comment


        #4
        Hi atmywitsend!!

        I don't know the answer to your specific question BUT I wanted to tell you that you are in the right place for help and support. ETA: I see Des answered you - he is wonderful as are many others here.

        Did you have a CMA (comparative market analysis) done by a Realtor on the value of your home? The house may be worth even less than you think - mine sure was.

        Don't make yourself sick with stress or try anyway! I do understand - trust me! Here's a hug for you {{{ }}}
        ~~ Filed Over Median Income Chapter 7: 12/17/2010 ~~ 341 Held: 1/12/2011 ~~ Discharged: 03/16/2011 ~~
        Not an attorney - just an opinionated woman.

        Comment


          #5
          Thanks, ValleYum!

          I don't have a CMA. The only value I have is the PVA assessment.

          I honestly am ready to just give in and give up completely. This is driving me crazy! :-)

          Comment


            #6
            Originally posted by atmywitsend View Post
            Would I be better off pulling out of the bankruptcy, selling or giving the house to my mother completely and then just trying my luck with my creditors? There's no way I can come up with $9,000.
            You cannot dismiss the Chapter 7. You cannot transfer the property. If the trustee tries to extort $$ you have two choices:

            1. Work a deal with the Trustee and try to pay it out over 6 months to 1 year (the cheapest way to go and the least complicated). or

            2. File a Motion to Convert to a Chapter 13.

            Your decision is based upon the $$ involved. I have a case right now where the client owed about $7k to the estate and we settled for $4.5K with payment over 10 months. This was a lot cheaper than converting and making my client sit through a 36 month Chapter 13.

            Des.

            Comment

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