My "homes" and bankruptcy

[gunnagtthr]

Thank you so much for all of your answers...you all are some of the most educated people I have seen on any boards. I now know that my interest in the house is non-exempt because I don't occupy it. That has brought up new questions. I am going to ask the questions in a new thread...thanks so much. All of this information and good will does sprinkle sanity into my mind and heart!
((hugs))

[btbeme]

It appears that so much depends on the trustee...and that scares me. Is it a crapshoot to hope you get a "nice" and "understanding" one?

Trustees have a job to do, and they also have someone watching over their shoulder to ensure that it is done properly. Bankruptcy is tough, as it should be, but that doesn't mean that it is the end of the world. It is designed to be a new start. Trustees are bound by law to look over your estate, measure what is allowable as exempt, and then consider all options to recover anything that is not exempt in order to distribute it to creditors. They have wide-ranging powers to do so.

Usually, they will look objectively at the situation as a whole. For instance, a home with someone else living in it means that the Trustee might be more willing to consider alternate offers to extract the equity, rather than go through the trouble and expense of seizing the property, evicting the occupant, and all the contortions of selling the house. But that doesn't mean that any alternatives are any fun or any less painful than the "worst case" scenario. Trustees are human, and they have to be somewhat practical in their practices, so a shorter answer to your question is "yes" - a well-traveled Trustee will be more likely to find practical solutions to sticky situations, but that doesn't mean that you will like any of the solutions they come up with.

As far as the home value, it certainly works to your advantage to have it as low as possible, and the Trustee will certainly get their own opinion as to the value. Some will simply look at Zillow to see if your valuation is reasonable; others will (if they see cause) will have it appraised. Of course, there is a cost involved in seizing and selling the property, which they might estimate at about, say, 8% of the sale price, so they may back that amount out of the valuation. It all depends on the Trustee, really. Doing a CMA would help you and your attorney make plans; it may or may not be all the Trustee wants to see.

Sorry to say, but there usually isn't any particular way for you to "get" a particular Trustee. I have seen some attorneys time their submissions in order to get certain Trustees as they rotate through a predictable schedule, but Trustees are assigned files in many different ways in every different place.

When all is said and done, the very best thing you or anyone can do is to make your file as clean and "wart-free" as possible. Don't count on a Trustee turning a blind eye to something they have every right to question. Spend the time before filing with a good attorney (and plenty of time) making whatever adjustments are legally allowed to make your file as clean as possible.

[keepsmiling]

Unless there is some reason not to accept the CMA (it's bizarrely low perhaps) it should be ok. Remember it needs to be priced for quick sale. Mention that to the appraiser and point out any unmade repairs plus age of furnace, roof etc.

You can certainly try writing your situation, but I doubt the tt will care about it. It's not their job to be caring and understanding about us. It's their job to find cash for creditors. We have to all hope that Washington's new crazy carve out policies don't make their way past the state lines.

Somehow everything will eventually work out. Good luck and ((hugs)))

[gunnagtthr]

I have a call in to a realtor, and to my attorney, but I want to be prepared and thank you so much for your help...this really is stressful and I can't wait for the knot in my stomach to go away.
It appears that so much depends on the trustee...and that scares me. Is it a crapshoot to hope you get a "nice" and "understanding" one?

so, will many trustees accept a CMA for a homes value? I assume you attach it to the papers you submit to the attorney for filing? And maybe a letter to the trustee explaining the situation? I have to stay in my house once a month for work...if the house is sold, I am really screwed. If I had money to pay for a hotel when I am there working, I sure wouldn't be declaring bankruptcy.
This just gets worse and worse....

[btbeme]

This may be a dumb question, but what is a CMA and how do I find one for the price you paid?

A CMA is a Comprehensive Market Analysis (or Comperable Market Analysis). It is done by a Realtor or broker and compares basic home values in your area, using public info, market trends, etc. as a guideline. A BPO (Broker Price Opinion) is a step up from a CMA (but falls short of an actual appraisal) and typically uses specific information about your home to analyze and adjust for its value as compared to local homes.

A CMA is pretty informal; a BPO is usually done in a lender's preferred formatting. An appraisal is done by a licensed appraiser in a universally approved format, under strict guidelines, and is much more detailed.

[gunnagtthr]

could a realtor do a CMA? Do you attach it with your paperwork and hope the trustee accepts it?

[gunnagtthr]

guess I should have googled it first! A certified market analysis. I would assume it is like a desktop appraisal I just had to get for my car? How do I find one?

[gunnagtthr]

This may be a dumb question, but what is a CMA and how do I find one for the price you paid?

[ValleYum]

Do you have appraisals or CMAs on the houses to be sure of the equity amounts? Zillow's list price was $25k higher than a CMA prepared for us by a local short sale specialist who charged me $25 to do this. I would think the smaller the amount of equity involved with both places, the better it would be for you in the BK situation.

A good BK lawyer can tell you for sure - and the really good ones pretty much know what will be a "problem area" with the local trustees. btbeme and LadyInTheRed also give very good advice as always.

[btbeme]

These situations are exactly why having a good BK attorney is a must. In your case, I would opine that the chances that you won't have "complications" are pretty slim, but I'd leave that to your attorney. I'd expect that the Trustee would be very interested in $60k of equity, so it would be in your best interest to discuss this in depth with a well-traveled BK attorney or two or three.

A forced sale is usually a last resort for the Trustee. Forces sales are messy and complicated, which are two words Trustees don't really like (does anyone?). However, they have a sworn duty to extract whatever they can within the boundaries of the law to pay creditors. Unless you can somehow get the equity exempted, I would expect that you would have to strike a deal with the Trustee for a cash offer of some sort. But get some legal opinions soon.

Your options may include a Ch 13.

[LadyInTheRed]

Quite a while ago, somebody posted here about being on title to a family member's home for convenience only (either to get a loan or for easy transfer after the family member's death). They didn't consider the home theirs and the family member had made all payments. One of the attorneys who post here said that although the poster may be on the deed, they may not have "equitable title". This might be the case with your daughter's house. Some attorneys may not be willing to take a position like that because it could mean having to fight with the trustee. So, if your attorney says that won't work, you should consult with several other experienced BK attorneys and ask about this issue.

[gunnagtthr]

So, Staci
are you saying it might not be worth their trouble? The main house that I occupied for 12 years has about $60k in equity. I stay up there once a month for work (yes, UNCOMFORTABLE, but no choice...no money for a hotel), but do not live there the other 3 weeks per month.
the townhouse, my daughters, has 10-20K equity. I stay there about once every 6 wks for work, and my daughter has made all the payments.

When I gather all of my papers, does it make sense to write a letter detailing the situation. My daughter definitely should not be punished for my bankruptcy. The other house...would be an incredible bummer if it's sale was forced....

[SMinGA2]

Worst case scenario: the trustee forces the sale of these properties, and takes your ownership interest.

In reality though, the trustee would have to use the proceeds to first pay the mortgage & costs involved with selling.

Clearly I do not "occupy" them.....so, what does that mean as far as the bankruptcy goes?? and, yes, I will talk to my attorney, but please...give me some thoughts....

[gunnagtthr]

Clearly I do not "occupy" them.....so, what does that mean as far as the bankruptcy goes?? and, yes, I will talk to my attorney, but please...give me some thoughts....

[ValleYum]

Not to be a Debbie Downer here but the exemption reads "occupy". Can the OP take the BK exemption for the home he owned with his ex partner without living in the home?