Need advice

[helpmeJC]

I am looking at joint filing chapter 7 along with my spouse, seeing atty on Friday

My biggest worry now is the equity in my house (the home is only 2 years old)
it is tax assessed at $254K and I only owe the bank $170K for the mortgage.
The home may well be worth $275-300K, but would be hard to sell right now at that price.
WA state has a homestead exemption of $120K

I was self employed and my business just failed (this month) from the down economy.
Family of 4 and I now have $0 income. I am looking for a job, wish me luck.

I am worried because now I cannot pay the mortgage.
Can I count on the homestead exemption to save my equity?
What if the bank forecloses and auctions off the house on a few months and sells it for way less. Do I lose my equity? Will BK delay the bank from selling it?
What about the new mortgage bailout help, will it help me?

Thanks for any help

[BROKENN]

Hi and welcome

Check out the price of your house on www.zillow.com. But you need to stay current on your mortgage to keep it, otherwise they foreclose. A BK would give you more time. For instance, you can wait for preforeclosure, then file. Then you have more time as an example.

You won't get the equity I don't think except to pay creditors if you are an asset case. I may be corrected on this

Sorry about your business. A lot of that going around.

[JRScott]

The amount you need to exempt is the difference between what it is worth and what you owe. So if as you say it is 120k allowed in WA though that seems high to me, then if you owe 170k on the home it can be worth 290k. (Make sure the 120k is correct).

I do hope you find a job soon.

If the bank foreclosed on the home and sold the home, then they most likely would start the bidding at less than what you owe them, and yes you'd lose your equity in the home. If they ultimately got more than you owe them I do think you'd get the excess back.

I would wait to file until after you get a job, the reason being you might run up additional debt between now and then and to give yourself the best chance you'd want to be able to discharge it. Nothing wrong with seeing a lawyer and talking to them to get the ball rolling a bit though.

[helpmeJC]

The Washington State Homestead Exemption increased from $40,000 to $125,000 effective 07/22/07.

For more information see the Washington State Legislature web site: http://apps.leg.wa.gov/billinfo/summ...805&year=2007/

I have about 5 grand to get by a couple months without a job, not much longer though. I guess I should make my next house payment and punt to get a job quick.

I have 2 credit union car loans, $50K AmEx CC, $7K line of credit, and about $80K in business debt, that I will not be able to make anymore payments on starting now.

[JRScott]

Good that should be enough to help you , very generous of your state .

Good to hear you have some savings , learn to pinch corners while you need to. For food check out angelfoodministries.com. They have good food at cheap prices to help the needy. ( a box of food for 1 week for 4 folks is 30 dollars through them, menu changes month to month and their are other packages you can get to supplement )

[helpmeJC]

Thanks for the help