Is is possible to file Chapt 7 with a house?

[tofu4you2]

If we fall below the means test for a family of 7 in NC, we are $6700 a month...around $80k a year vs. $83k (median for family of 7), but we have a home that has equity in it. Can we give up the house to file Chapt. 7? If we surrender it, do we pay the IRS the difference in taxes? We are $95k cc's.
Any advice would be appreciated. Thanks.

[sharksfan]

What are the exemptions for your state? How much equity do you have?

[tofu4you2]

a little more info

We have a $10k homestead exemptions and that's doubled with a spouse. If you take a 2004 tax appraisel at $257k and we owe $176k on it, we have $81k. The real estate market analysis was about $345k, but the market is pretty crazy right now. Most homes are selling for around $369k and up in our neighborhood.

[HHM]

You have asked this question before (or something similar) so please don't multiply posts on the same issue.

I think in your other thread I recommended getting an accurate appraisal (that 2004 tax appraisal is worthless). If your house has NOT been selling at the asking price of $345K, you have to wonder if that is really the value.

In any event, yes, you can surrender the house in BK. What would probably actually happen is the BK trustee would take it and try to sell it. But in any event, you would surrender the home and NO, you would NOT have any IRS liability for any difference because the surrender occurred in the context of a BK (plus, there is a new law that also protects homeowners from tax liability on foreclosures).

Even with a bad real estate market, you are in a fairly positive position on the house. Please refresh our memories about your debt situation, I would really hate to see someone surrender a positive position on their house.

[tofu4you2]

Sorry about the multiple threads on similiar issues. I guess I am just trying to figure out where we stand. As far as background info, it's all covered in the Chapt. 13- 'pay collections or creditors'. This is all so unnerving. We are speaking to our tenants tomorrow about buying, if they don't intend to purchase the house, we need to find a good lawyer. That's tough to do...who do you trust? Don't know if we can meet the financial obligations of a 13 but, don't know if we qualify for a 7. Thanks for your help.