Letting house go...question about equity.

[berrymom31]

We owe 240,000 on our house and a few years ago it appraised at 300,000. I'm sure with the market like it is...it will not sell for that amount.

If the bank sells it and gets 40,000, do they put that towards my debt or do they get to keep it....or do they give it back to me?

We are trying for a 7...and after quitting my pt job, we will still be about 9 thousand above the median for our state.....our atty says there is a chance we could get 7. If we make money on the sale of the house, and it goes towards paying off our debt, does that mean we are more likely to get approved for a 7?

[hnhlvr]

Are you current with your mortgage? The bank will take over and sell it if you foreclose and then you will not see a dime.

The only way you could possibly get any money is if the house sells for more than owe. Have you had a realtor look at it?

Before deciding to walk from our home, we had comparables run. Similar houses that were selling ALL were going for much less than what we would need to keep from short-selling. Similar houses that were selling for MORE than what we would need weren't selling AT ALL. We'd either short-sale or not sell.

[Frogge]

I would have a realtor run comps for you and find out what it might bring in a sale.

[berrymom31]

We are current on our payments now, but are not planning making any more payments as in the next couple of weeks we will have a new rent payment...and we are spending next month's mortgage money on 1st and last months rent and security deposits and so forth.

We are in a hurry to move because we are trying to beat school starting on August 19th.....this will be a new school and new town for our kids and I want them to be able to start on the day school starts.....

[Help!]

We were told that our house would be sold at auction, and this amount is usually quite a bit lower than what it would sell for if a realtor had it on the market for 60 days. The equity (if any), unless exempted, would become part of the BK estate. It won't help your Ch. 7 case (unless the trustee gets the house appraised) because the amount of equity won't be known until the house is auctioned (and this will be months away from the discharge date of your Ch. 7).

[berrymom31]

Well, we are waiting 6 months to file....as I am quitting my job in order to try and qualify for a chapter 7. So, maybe by then it will get sold...probably not though...I hear the whole foreclosure process takes a while...sometimes a year or more....

I was under the impression that one of the ways to qualify for a 7 is if you can prove that creditors will get more by the liquidation of your property than if you were to pay it all back. So, if the house is sold for 30,000 more than owed....then wouldn't that go to the creditors and would be more than what we could pay back over 5 years?

So, if we end up with a 7 and it is done and discharged and then our house is sold and there is some equity...does that come back to us? I'm confused and grasping at straws...wondering if were going to pass for a 7...

[Help!]

Yes, if the house gets foreclosed on and auctioned off before you file any equity would be helpful as an asset available for liquidation. The problem is that no one seems to have the equity in their home they think they do. If anyone wants to chime in with a home sale success story, feel free, but unless you put 40% down on your home to begin with you are likely upside down with the rest of us.

No, you would not get the proceeds from the sale of the home. When you file your petition, you will be required to state how much you owe on the home and what its market value is. At that point, the case trustee will go after any portion of the difference that is not exempt (and the exemptions are generally very modest).

[hnhlvr]

Yep, you have to have equity in your home to begin with AND a guarantee your house will sell for what it was appraised at a few years back. Realistically it will not sell for anything close to what WAS appraised at.

Talk to a local realtor and get an idea of what comparables are SELLING for, not what they are on the market for. This should be your priority.

And, FWIW, my mortgage hasn't been paid in three months and we've yet to get any notice our house is in foreclosure. Possibly it makes a difference which lender(s) you're with. The first on my house is IndyMAc and that bank is all messed up having multiple investigations, so all I know the home could sit for years and be an overgrown garden/archaeological excavation site by the time it's sold.