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    House exemption questions

    My home has hardly any equity based on my 2 mortgages and the appraisal that the lender did 2 years ago. However, I know that if it was appraised today, due to the market, it would be below what I owe.

    If you are upside down, so-to-speak, can you still keep your home? I am filing chapter 7 most likely. (All of that other debt on my second mortgage is credit card payoffs from before, trying to be a good borrower!)

    Another question I have is that I have a home with between 10 and 20 acres. We live out in the country. Do they exempt it all??

    Thanks

    #2
    Yes, you can keep your home in a Chapter 7, so long as you're current. (You may be able to get the lender to do a loan modification too, allowing you to stay in the home). However, the key issue is whether it makes financial sense to keep a home you are substantially upside-down on. By substantially, I generally feel that more than 10% is substantial.

    Exemptions depend on the State you live in. The key here is, the exemption is for equity in the home... not really the home itself. What I mean by that is, that if you are upside-down, you have no equity. Therefore, you have nothing to protect with an exemption. Exemptions just keep the creditors and Bankruptcy Court from taking assets and money from you.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

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      #3
      Thank you

      I called the lender and they told me it was actually a broker's opinion and not an appraisal, so they wouldn't give me a copy.

      If real estate hasn't been recently appraised, do I need to get it appraised, or does the trustee?

      Comment


        #4
        Your lawyer will have it appraised. I haven't seen the Trustee doing appraisals, unless they are keeping the property and selling it off.
        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog

        Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

        Comment


          #5
          Is the home worth less than the total of the 1st and 2nd, or just less than the 1st? If less than 1st, you could look at a lien strip in ch13. We're considering that option rather than keeping both in a 7 since the 1st barely covers the value of the home now.
          1/15/10 Filed ch7 2/18/10 314 meeting
          2/22/10 Report of No Distribution
          4/20/10 Discharged 5/20/10 Closed!

          Comment

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