CH7 Asset case questions.

[tay666]

Ok, I am almost positive our CH7 will be an asset case.
Because of the equity in our house.
We owe $18,000.
Tax department says it is worth $45,000.
A 2003 appraisal said it was worth $60,000.
I figure it might sell in the current market, in it's current condition for maybe $30,000.
Anyway, I am sure the trustee is going to make our case an asset case.
Ohio only allows us $10,000 homestead exemption.
I'm not worried about loosing the house. We are actually looking forward to getting rid of it (and our debt) and moving on.
Especially since we aren't using our homestead exemption. If I understand correctly we will be entitled to the first $10,000 in profits from the sale of the house.

What I am curious about though is if the process is similar to a foreclosure.
More specifically if it is an asset case, and the trustee is going to sell the house, is the timeline to vacate the house the same as a forclosure would be.

Anyone with any experience?

[MomIcantFindmy]

I could be wrong here but I don't think you will get any profit from the sale of the house.

[tay666]

I could be wrong here but I don't think you will get any profit from the sale of the house.

Actually I remember reading somewhere.
Since we are entitled to a $10,000 homestead exemption on our house. If the trustee seizes the asset and sells it, we are entitled to the exempt portion of the profits before the balance is distributed to the creditors.
Profits being the remainder from the sale after paying the mortguage off, and any selling costs.

[MomIcantFindmy]

However wouldn't the trustee take the profit and distribute it to your creditors as they would in an asset case?

[kl030505]

I think you might get some, but the $10K exemption has to cover everything else too - your used furniture, wedding rings, cars, bank account balance, etc. Not that thevalue of all those things necessarily adds upt to $10K, but we are using almost all of ours between everything (including next year's tax refund).

Do you have an attorney? I highly recommend finding a good bk atty.

[kiddles]

No idea about the timeline, but don't assume the trustee will want your house. It costs him money to sell the house, all of which comes out of the selling price, and has to give you your exempted amount - would there really be enough left over after all that to make it worth his while?

The BK estate is created on the day you file - you owned the house on that date, so you have the expemtion for your home. If the trustee seizes the home, he must pay you the exempted amount.

If you sell the house before you file, then your BK estates doesn't have a home in it, so there's no home exemption.

[tay666]

I think you might get some, but the $10K exemption has to cover everything else too

No, the $10,000 is the homestead exemption.
We get other exemptions for the other stuff.
In Ohio, homestead can only be used on youre house that you are living in, and any extra can't be used for any other exemption.

No idea about the timeline, but don't assume the trustee will want your house. It costs him money to sell the house, all of which comes out of the selling price, and has to give you your exempted amount - would there really be enough left over after all that to make it worth his while?

I know that. But on paper it is going to look like a huge amount of equity to him.
I guess it all depends on the trustee and how much he knows about the housing market around here.

The BK estate is created on the day you file - you owned the house on that date, so you have the expemtion for your home. If the trustee seizes the home, he must pay you the exempted amount.

If you sell the house before you file, then your BK estates doesn't have a home in it, so there's no home exemption.

Thank you. That is what I understood as well.
I remember researching this quite a bit last spring when I started the whole BK planning.
When I first resigned myself to the fact that we will probably loose the house. Then actually got excited about the idea. We tried to sell a few years ago when the market was hot, and it wouldn't go.
A move would be a good thing for us, a complete fresh start and nothing to reminds us of these terrible last couple years.
Though if the trustee decides not to go after the house, I would be ok with reaffirming and continuing payments. Then we can just sell it on our own.
Either way, it's why I have never been late on the house payment yet.

[tay666]

So, anyone here have their house seized as an asset and sold?

[tay666]

No CH7 asset cases here?

[Minnymouth]

A little input here,
My home was seized and sold at auction by the Trustee ONLY BECAUSE it had a bad title and the mortgage company FAILED to put their lien against it when they filed their paperwork at the Courthouse. According to the paperwork they filed I owed the home free and clear and the mortgage company only had a lien against the land (thier mistake)......

With your home having lots of equity in it, the Trustee could see this as a valuable asset for resell to pay your creditors.

Yes, they would have to pay you the homestead exemption I'm sure, off the top of the proceeds, then pay the mortgage company, then anything left would go to the creditors.

Now if you reaffirm on the home, get the bankruptcy over and done, then you could sell your home as you see fit......

You have to decide which option is best for you.

Course this could put you in a Chapter 13 if your behind on house payments and intend to keep it.....

You need to talk to an attorney about options open to you and the best route to take in your situtation.

My case was very unusual for a Chapter 7, one in a million!!

[tay666]

I am fine with him seizing and selling the house.
We actually wanted out of here a few years ago but could find no buyers and we were not going to do 2 house payments.

We are completely current on the house payment, and have never been late on it.

If he decides not to seize the property, and lets us keep it, I will continue to make payments, maybe make a few repairs and see if I can sell it again.

What I would like to know though. Is if he seizes it. What kind of timeline are we looking at.
I know how it works with a foreclosure.
But think if the trustee seizes it the timeline would probably be different.
Basically looking to find out, if he seizes it to sell it. How long would we be able to stay in it.
As you said, yours was an auction.
But I seem to remember some others saying theirs were listed with a realtor after being seized. The trustee trying to maximize profits.
But I don't know if they were allowed to continue living there through that or if they had moved, or were forced to move.
Unfortunately it seems that most of the people who have been through CH7 asset cases don't post here very much anymore.

[Minnymouth]

Even though my home was sold on the auction block it was not sold for 18 months......... and I lived in it clear up to auction day, then I bought it back from people who purchased it the same day....

(They kept outbidding me, so I had to stop bidding)...

I never moved from day one.............

Normally after an auction you are given 10 days to move out....

[tay666]

Good to know.

I know it is definitely something I will be asking attourneys when I start going for consultations.
Idealy, I would be great to be able to stay for 2-3 months. 4-5 would be totally awesone!
We have lived here for 15 years so it is going to take forever to pack stuff up.
And a few months rent free would be perfect to save some cash.

I'm not going to bank on it until I know more though.
I will have contingency plans in place in case for some reason we have to move within 30 days, or something like that.

I have been planning, and looking forward to this for over a year now.
Really starting to get hopeful.
But I'd rather plan for worst case and not need it. Than need it, and not have a plan.

[Minnymouth]

From the day you file your petition you are going to have approx 90 days till discharge. In the meantime they cannot start foreclosure proceedinds due to the automatic stay....

Foreclosure takes between 60 and 90 days (after discharge) and then the sale....

So you have between 3-6 months to stay there (probably longer)