House Equity

[Hamiltonhiii]

My county says my home is worth 165K and I couldn't get them to reassess. My realtor and Zillow says my home is worth 155K. I owe 158K on it, and I'm worried trustee will try to say I have equity in home, and either try to take it or make me pay something to creditors.
Does anyone have any advice on this?

[SMinGA]

Have you reviewed your state's exemptions?

Every state has a list of exemptions, to show how much value you are allowed to protect/keep in certain kinds of items. It is common to have exemptions of $X in real property (such as a house), $Y in vehicles, $Z in personal items & household goods.

The realtor estimate is more reliable than either Zillow or your county tax assessor. I think in many cases, the county tax assessor is not trying to determine what the house would sell for. Even so, I don't know of any state that has $0 exemption in the home. Look up your state exemptions, discuss with your attorney - and you should be ok.

[keepmine]

How much equity does your state exempt?

[Hamiltonhiii]

I don't really know the answer to that. I have a $5000 Homestead Deed but I used that to cover cash in my checking account.
Is there a home exemption that is separate from Homestead Deed?
h

[SMinGA]

Have you already filed?

For your home valuation, what method does your district rely on? (Your atty should know, if you have retained one and/or already filed.) I doubt Zillow is a recognized source, since even they explain they can only give a range at best and its not to be used in making buying/selling decisions. When did the realtor give an estimate, and was it in writing? Is this the value you included on your petition - as it sounds from your last post that you have filed.

This is really something best discussed in full with your attorney prior to filing...

I don't really know the answer to that. I have a $5000 Homestead Deed but I used that to cover cash in my checking account.
Is there a home exemption that is separate from Homestead Deed?
h

[keepmine]

Your state exemptions are basic information that you need to have before you even consider filing.
If you have a lawyer, ask them that question now.
If not, a google search with the name of your state and chapter 7 bankruptcy exemptions will take you too a few sites with info.

[Hamiltonhiii]

Virginia has a stingy $5,000 exemption. According to my county assessment, I have some equity in my home even after the exemption is applied. It is a small amount. Can anyone address what happens if it is only a small amount of equity?
h

[SMinGA]

It really depends on the trustee & district - so a specific answer is not possible. The trustee may want you to pay the value of the equity, if the trustee goes by the county's assessment OR decides to challenge the value claimed on your petition. But since you have the cash, it should not be a problem. Or the trustee may not bother with a small amount, depends as I said on the trustee/district.

A quick google search:

$5000 plus $500 per dependent; may also claim rents & profits; sale proceeds exempt to $5000 (husband and wife may double), Cheeseman v. Nachman, 656 F. 2d 60 (4th Cir. 1981); unused portion of homestead may be applied to any personal property

May include mobile home

Must file homestead declaration before filing for bankruptcy

So if you did not file the declaration you would not have the option of changing your exemption claims now.

Virginia has a stingy $5,000 exemption. According to my county assessment, I have some equity in my home even after the exemption is applied. It is a small amount. Can anyone address what happens if it is only a small amount of equity?
h

[Hamiltonhiii]

SM, you are right about the exemptions. I can file a Homestead Deed which will cover all but a few thousand of the value of the property (using the overinflated county assessment). This is a ridiculous figure that the county has used; it hasn't decreased in value ever and yet everyone knows the local market crashed. I do not have anything in writing from a realtor and do you think that perhaps a professional assessor would be worth my investment?
But you said that the trustee would make me pay some of the alleged equity to my creditors and let me keep my house. Is this correct? Is this a pretty reliable guess at what would happen?
h

[SMinGA]

I said 'may' not 'would'. I'm not your trustee, I don't know your trustee, I can't speak for your trustee. I can only theorize on the possibilities, and as far as I know that is the worst case scenario. (Having to buy back non-exempt assets from the trustee...)

If you have filed - what value did you put on your petition for your home? And what does your attorney say about this topic? Where are you now in the bankruptcy process? Has the trustee questioned the value/equity or are you just exploring the possibility?

Talk to your attorney - find out if getting an appraisal or a realtor's market estimate would be a sufficient basis for value? That may be all you need to do, and amend your petition to show that value.

Staci

But you said that the trustee would make me pay some of the alleged equity to my creditors and let me keep my house. Is this correct? Is this a pretty reliable guess at what would happen?
h

[Hamiltonhiii]

Staci: Very helpful info and good line of questioning.
I just got off phone with Trustee's legal secretary and was told the following. Even at the county's 165K assessment, if I owe 158k on my note, the house isn't worth anything. There's just not enough equity with those figures to garuntee that any cash is going to be left over for the creditors.
That makes me feel better and I can now apply my $5,000 exemption to cash on hand. For those exploring this topic in the future, she did mention that 20-25K would be more of an equity value that the court would want to pursue. It costs a lot to clear me out and hire the company that would keep up the house and list it on the market.
I will get through this harrowing adventure with my dignity intact at least! And a few dollars in my pocket....
And I am 1 day post-interrogatory meeting.
One final question....does anyone know if the forms used for "amended" schedules are any different than the original ones I filed in VA? Of course they would contain different figures, but do I use the same forms?
h

[SMinGA]

Keep in mind the info from your BK court clerk is only good for your district. Others may go after lesser amounts, knowing that you're likely to pay it - and then there is no need for realtors, selling fees, etc.

As to how to amend - you should be able to use the same forms but mark them 'amended' at the top. Confirm with your clerk, they're great for procedural requirements as those sorts of things can vary district to district. Be sure and ask if there is a fee to amend. If there is and you don't know to pay it, could accidentally lead to your case being dismissed.

[Hamiltonhiii]

Yes, in fact, in VA it's $21 for new schedules to be submitted.