what happens to my house

A chapter 7 is going to liquidate your estate. Since you have equity in the house, a 7 trustee will want to sell your house and take your equity in that house to pay something to your other creditors.

You may be able to reaffirm the mortgage and keep the house (I know that's easily done with a car note), but I'm not sure if it's that simple since the new BK laws took over.

You may have to do a 13 instead. You'll keep the house, and can probably get by paying only 10% to the unsecured's. If you have an attorney filing, they'll know what you can and can't do in a 7. If you're filng pro se, make sure the mortgage can be reaffirmed.

Burban - DebtCruncher is exactly right. A Chapter 7 will not save your house - in fact, if you are behind on bills in a big way, that's the surest way to lose it. The Trustee is a court-appointed official that is duty-bound to sell your assets in order to satisfy your debts in a Chapter 7 case.

I definitely recommend speaking with a bankruptcy attorney about this before you proceed - they may be able to find a way for you to keep your house. The problem with a Chapter 13 is that you have to have an income to file Chapter 13, as it is a debt repayment plan - it doesn't eliminate the debts entirely. It's a 3-to-5-year long program where your payments are paid by the Trustee, but again, you must have some sort of income to do it. I don't know if your disability income will be enough to cover the payments that need to be made. The attorney can perform a means test on your income and debt and see where things stand and advise you from there.

Alot depends on the equity you have in your home and the state you live in.Some states have a homestead exemption for bankruptcy.If your state doesnt have a homestead exemption then you have to look at the equity in your home.


I talked to a bankruptcy attorney a few months ago and since my state doesnt have a homestead exemption we would have to go by the equity in our home which we have an exemption of 19,000 for both my spouse and myself.

Also like the others said it depends on if your behind on your house payments.If you were then a chp 13 would come into effect,meaning you would have to pay back creditors over a period of time,including back payments on home.

Either way you would have to reaffirm the mortgage. I would call a bankruptcy attorney and get a free consultation that most offer to get all the ins and outs of what is best for you.

Sorry if I am wrong on any of this, just been doing alot of research and talking to attorneys lately.

Guest - what you posted about the equity exemption is correct, at least in some states.

You have some very good information to share - why don't you sign up and join us? I think you could really help quite a few people with your own experiences. :D

Thanks. I'm thinking about it.I've got alot of helpful information from this site and everyone seems really nice.Until i came here i felt like I was the only one in the world with these kind of problems.I try my best to help out with some things that I may know a little about.

Burban, maybe you can wait until you find a new job. Once you have the job, you might qualify for the Chapter 13 bankruptcy. It will be a better choice in your situation. Going for chapter 7 means that you will have to liquidate your house for paying other creditors. You don't want to lose this valuable property at this stage. A new job is very necessary for you and put things in order.

I went to a bancruptcy attorney a couple weeks ago here in Georgia.
Please dont take this verbatim, but here's the jist of what I was told.

Chpt 7.. There is an exemption of $10,000 that you can claim as untouchable, protected or whatever they might call it.
If you own a house with a bunch of equity, you will be surrendering it when you file. (I'm guessing there are exceptions but since I am not a lawyer, just repeating what I remember.
Also, I was told that in order to qualify to file Chptr 7, your mortgage must be current.

The main thing I remember her saying about Chpt 13 was that you have to have an income to file.

Randy

So the issue is, how long has he been in his house and how much equity does he have in it? If there isn't a lot, he could reaffirm the mortgage. I encourage you to talk with an attorney. They can be more specific and most consultations are free. Also, bankruptcy attorneys charge a fixed rate which can be paid in installments.

You can sell your house IF you have not filed. However, you have to be current, and have a valid sales contract with a buyer who is prequalified for the mortgage BEFORE you file.
Since at this point people would already not be paying credit cards and such, it might be good to get the mortgage current and try to do this.
Of course, consult your bancruptcy attorney to make sure this is good in your circumstances.

Randy

Just a little addition, the exemption amount for equity in your home is different in each state.

Yep Sue your exactly right about the exemptions in each state.when filing a chap 7 and using exemptions you can choose to use either state or federal exemptions (federal usually being better).

Heres a list of federal exemptions i got from my attorney:

-$18,450 in equity in your home

-$2,950 in equity in your car

-$475 per item in any household goods up to TOTAL OF $9,850

-$1,850 in things you need for your job(tools,books, etc)

-$975 in any property, plus part of the unused exemption in your home

The amounts of the exemptions are doubled when a married couple files together.

In most cases you will be able to keep your home or car as long as your equity in the property is fully exempt.Even if your property is not fully exempt you may be able to keep it, if you pay it non-exempt value to creditors in a chap 13.

Bankruptcy is a very big decision and should be the last option ,but if you decide on it I would definitely consult at least 2 attourneys for a free consultation.

I agree Guest. Bankruptcy is a complicated process and while we here can give general information and it should never be construed as legal advice. Burban should consult with legal counsel. Many bankruptcy attorneys don't charge for consultation because most who seek them out usually have them file the paperwork right away. Fees are paid in installments and as long as the installments are made on time and in full before the discharge, Burban should be fine. The only thing I would recommend is that Burban should check with the Bar Association of his state to find out if any of the attorneys he's considering going with have any complaints against them.

Question:

We have a large amount of equity in our home. If we file chapter 13, will we be forced to liquidate?