Keep house in Ch.7

[hcl]

This forum is just great and very helpful.
I'm about to file Ch.7, separately from my husband. I have some asset in our house. I really would like to surrender this house, because I would have trouble in the future to make payments. My lawyer said, it's wrong and he wants to fight for me to keep the house. Any thoughts? Should I keep the house? Can trustee refuse to that surrender?

[AngelinaCatHub]

This forum is just great and very helpful.
I'm about to file Ch.7, separately from my husband. I have some asset in our house. I really would like to surrender this house, because I would have trouble in the future to make payments. My lawyer said, it's wrong and he wants to fight for me to keep the house. Any thoughts? Should I keep the house? Can trustee refuse to that surrender?

The lawyer is YOUR employee. Yes you pay him for advice but when you have a desire, it is his job to work you legally through your desire, not make the decisions for you.

Now, since you wish to give up the house and are filing separately, is your spouse or any other party involved with the Deed and/or mortgage? That will make a big difference.

Also you mentioned you have collateral in your house?? If this is true, you may be an asset case. That depends on the State you live in. That means some states FL and TX examples protect your house from asset values with Homestead exemption. 'Hub

P.S. more info please.

[hcl]

My husband is on the Deed and mortgage as well. We live in NJ. My lawyer said I would have to use Federal exemption. I'm not sure about collateral. Why do you think I have collateral?

[newbie2]

My husband is on the Deed and mortgage as well. We live in NJ. My lawyer said I would have to use Federal exemption. I'm not sure about collateral. Why do you think I have collateral?

Because you said in your first post "I have some asset in the house".

[hcl]

Why to have an asset case is bad? Could you please explain?
Appreciate your help.

[SMinGA]

I'm guessing by 'asset' you meant that you own property. Do you have equity in it? Meaning, is the house worth more than what you owe on it?

There is a problem with you filing for bankruptcy (without your husband) and intending to surrender a home with a mortgage that you share with your husband. You said he IS on the mortgage. If you give up the house in a bankruptcy, they cannot pursue you if it sells for less than you owe. But they can go after your husband for any balance remaining. This may be why your attorney said not to surrender it.

[hcl]

Thanks. That explains it.
What I understood from my lawyer, that the value of the house is more than I owe on the house. But not a lot. I have two mortgages on that house (both from Chase). I just afraid that in a few month I would not be able to make payments. Then what?

[Mensa1]

But ony you are filing, not husband too? He is on the deed and mtg on the house.
So that is a problem because he himself will still be responsible for the mtg.

When you file it would be in your best interest NOT to reaffirm the mtg on the house. That way if you do have trouble financially later you will not be in any jeopardy of having the bank come after you for deficiency judgment for the unpaid balance.

As to your husband, he will be left fully responsible and the only way he gets out of that is to sell the house or default on the house, then he may eventually have to file Bk.

[hcl]

I have another question, please.
I'm filing because of personally guaranteed business loans. We also have some debt on personal cc (current on payments). My husband (not filing) is primary cardholder. Can I include these cc in BK? We are still making payments. Thank you.

[newbie2]

hcl, you have to include all your debt in your bankruptcy. The problem is, your husband is not filing. Your bankruptcy discharge will only release you from the debt, not your husband.

[Mensa1]

hcl: The other issue for you about filing is you need not be paying any unsecured creditor within 120 days of filing, so you need to stop paying the cc's 4 months before you file, or elose TT considers preferential payments.

[hcl]

If I stop paying all cc, they will start to collect from my husband. What should I do then?

[SMinGA]

Probably best to consult an attorney on this, but if you file individually then there is no reason for you to pay on your cards. Your husband should continue to pay anything he has.

Find out how your accounts are set up. Which are yours, which are his. Are any joint? Having a card on your husband's account does not make it yours if you are only an authorized user. Have yourself removed as AU from any accounts where that is the situation.

For any joint accounts, your husband will still need to pay although your personal liability on them will be discharged in the bankruptcy.

Back to the house situation - seems like your attorney is (wisely) advising you that giving up the house would be pointless if you file solely. If you file jointly with your husband, that may result in a different outcome.

[SMinGA]

Not quite.

When you file you'll need to disclose if you have paid any single unsecured creditor more than $600 total in the 3 months prior to filing. If you have, you don't get in trouble - its just that the trustee can demand those funds from the creditors to repay all unsecured evenly. After taking a fee out for his time & trouble of course.

Payments to friends/family are scrutinized for a longer time period than 3 months of course.

It is kind of pointless to keep paying on accounts if you are 100% certain you are going to file. Just throwing money into the bonfire really.

hcl: The other issue for you about filing is you need not be paying any unsecured creditor within 120 days of filing, so you need to stop paying the cc's 4 months before you file, or elose TT considers preferential payments.

[hcl]