QUESTION
Can filing chapter 7 or 13 eliminate the debt or will we be forced to sell the house anyway if equity exceeds federal homestead exception?
Asked on Apr 29th, 2014 on Bankruptcy - Michigan
More details to this question:
We lost a civil case for damages (no negligence, no fraud, no illegal substances and no under influence) and there is a judgment against us. We appealed.
13 ANSWERS
Debt Relief Attorney serving Anaheim, CA
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Marlin Branstetter Attorney at Law
If you have equity in your home above what you are allowed to protect in bankruptcy your home could be sold. In most cases the trustee will allow you to purchase the excess equity if you can raise the funds. You should contact a bankruptcy attorney as some states do not use the federal exemptions (California for example). You may be able to protect more of your equity under state law.
Answered on May 02nd, 2014 at 12:53 PM
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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Need more details, but if you've lived in Texas at least 2 years, you can utilize the Texas exemption scheme.
Answered on May 02nd, 2014 at 3:53 AM
Probate Attorney serving Washington, DC
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Apex Legal Services, PLLC
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A Chapter 13 is a repayment plan. It is for wage earners who usually on a home who want to reorganize their debt. This case sounds more like a Chapter 7. Chapter 7 discharges most unsecured debt. There are exceptions such as student loans. You need to talk to a lawyer about your specific case.
Answered on May 01st, 2014 at 4:02 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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The federal homestead exemption is irrelevant to Ohio. Ohio has adopted it's own exemptions and doesn't use the Federal ones. The Ohio homestead exemption is $132,900 per person (remember, if the home is only in one spouse's name, then you lose the exemption of the other spouse). Civil cases are dischargeable but you need to consider if you'll be Chapter 7 or Chapter 13. That's based on income.
Answered on Apr 30th, 2014 at 4:33 PM
Litigation Attorney serving San Antonio, TX
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Graves Law Firm
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Your question doesn't contain enough information for a definitive answer, but if you're in Texas you can take advantage of the Texas homestead exemption? It's unlimited if you qualify. See a bankruptcy lawyer. Good luck.
Answered on Apr 30th, 2014 at 4:12 PM
The Oregon homestead exemption exceeds the federal homestead exemption, so make sure you investigate all state exemptions as well as federal ones. The non-exempt assets must be paid for or surrendered in any bankruptcy, but the advantage of a Chapter 13 is it lets you pay for them over a longer period of time, up to 5 years. The value of your non-exempt assets becomes the "best interest number" which sets the minimum amount you have to pay toward your debts in a Chapter 13. So if you have a regular source of income, that is the way to go if you want to keep your house.
Answered on Apr 30th, 2014 at 4:11 PM
There is more flexibility in a Chapter 13, assuming you qualify. It's too much detail to get into here. You need to meet fact-to-face with an experienced bankruptcy attorney for guidance. Good question!
Answered on Apr 30th, 2014 at 1:00 PM
If you equity exceeds the federal exemption amounts but you want to keep your house, why not consider a Chapter 13. Hiring an experienced Chapter 13 attorney can let you make monthly payments over 5 years to pay the creditors the unprotected equity in your property without the need to sell.
Answered on Apr 30th, 2014 at 10:22 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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You should speak with your attorney, or preferably a bankruptcy practitioner to explore your various options.
Answered on Apr 30th, 2014 at 9:18 AM
A New York debtor can also claim the NYS exemptions, where the homestead exemption is much more generous than the federal exemption. Depending upon which county you live in, the NYS homestead exemption can range from $75,000.00 in Sullivan County to $150,000.00 in the 5 boroughs of New York and in Westchester, Rockland and Putnam Counties. If the judgment is filed in the County where your home is located it will also constitute a lien on your residence, which can be avoided pursuant to a Bankruptcy Court Order under 522(f). You should contact competent bankruptcy counsel to discuss these matters.
Answered on Apr 30th, 2014 at 9:15 AM
Insurance Law Attorney serving Pasadena, CA
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KJM Law Partners
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With a chapter 13, you can keep your house as long as you comply with all of the terms of the plan. With a chapter 7, the trustee has the right to sell your house and give the proceeds to the creditors. The trustee often evaluates whether it would be cost effective to sell assets, I.,e., will the cost of sale be roughly same or greater than the proceeds of the sale.
Answered on Apr 30th, 2014 at 9:03 AM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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In NJ, if the house is jointly owned, the federal exemption is about 43,000. If you have more equity than that, the Trustee may offer you a buy-out (which means that you pay him to buy back your interest in the Property). There are several other issues that would need to be looked into, so consult with Bankruptcy Counsel in your state. (Please note that I say in your state, as we are not told where the question arises from, and my answer is NJ specific.)
Answered on Apr 30th, 2014 at 8:56 AM
The short (incomplete) answer to your question is maybe. If you only have a little excess equity you could very well keep your home and simply pay the difference to the trustee. If there is a lot of equity then you could find yourself in a situation where you have to walk away. However whatever equity you can protect is still yours to keep. You should strongly consider hiring an attorney to handle your bankruptcy for you.
Answered on Apr 30th, 2014 at 8:44 AM