unique chapter 13?

[carolen]

I have now been to 2 attorneys. One says no problem with the 13, other says we have to pay 100% back....the attorney I saw yesterday says we can't even file because I have 1 more payment from unemployement and the courts are not agreeing to anything with anyone that has or may have more unemployment. I am ending my 99 weeks. ok so at least 6 months until I can file? Our home is worth maybe 450,000. There is only a heloc on it for 100,000. There are 4 owners on this property have been for a very a long time. It is my family home, my mother, 2 brothers and myself are on the title, and the 2 spouses including my husband who actually has the heloc are shown as "non-vested" spouses on title. So we are in California and my understanding of home exemption is 100,000 if you are living in it. If our home is worth 450,000 and we owe 100,000 that is equity of 350,000 divided among 4 people which is less than 100,000 for my share. My husbands income is 50,000 per year wages and 22,000 per year retirement, before deductions. There are the 2 of us, and 2 dependents. We have 60,000 cc debt and 60,000 student debt. Any thoughts?

[justbroke]

First, to qualify for a Chapter 13, you must have regular income. Some would consider unemployment insurance (UI) to not be regular income, since it's temporary in nature. If you're filing with your spouse, then you do have regular income from his retirement benefits. I don't know why UI would be a problem in your situation, but I'm not familiar with the specific district and local practices in California. It would be no problem in Florida if you were filing a Chapter 13 and the spouse worked. It's all about "regular income".

Since there are 4 owners and a HELOC, this complicates your ownership of the property. It may not be considered your homestead for purposes of exemption and this may be what's confusing the various attorneys. I think that some (or one) of the attorneys is thinking that you don't qualify for the homestead exemption and that the $100K would be what they call a "chapter 7 liquidation" value. That means, you'd have to pay your unsecured creditors at least $100K over the life of the Chapter 13. That puts you in a 100% plan from what I can see.

You are going to need to really do some research and find an attorney who is WILLING TO FIGHT for you on the homestead issue. Otherwise, I can only see a 100% plan in your future.

Are you worried that filing Chapter 7 will cause the property to be sold?

[carolen]

I am just plain worried....this is our family home. When my father died in 2003 the house was put in my brothers, my mothers and my name. My husband and I moved in here to basically care for the house and ensure my mom was somewhat protected from 1 of brothers who was bi polar and took advantage of her. That brother has passed away 1 year ago. (he was never on the deed) My mom has lived in this house 55+ years. I have to protect her right to stay here. House needed lots of repairs, 100,000 heloc was taken out to get electrical, plumbing other stuff taken care of. We were making the payments ok (never had problem with heloc payment it is current no payments late or missed) when I was working and getting ui because student loans were in forbearance. Ui going away, student loan payments starting again. The heloc will be rolling over into 30 year loan with much higher interest rate. My brothers that are on the deed are really in worse shape than we are. 1 not working living on his 1000.00 retirement other working but upside down in his house, 2 kids in college. My husband is 67 doing a very physical job and probably can only work 3 more years, which is asking alot for him to hang in there that long. I worked for 26 years for the city the last few were part time, and when the city budget got slashed all the part time people were let go because we were not union. The positions eliminated. In my wildest dreams I could not have forseen where we are today!!

[LadyInTheRed]

Carolen, I think you need to talk to a couple more attorneys or call the ones you already talked to and get clarrification on the homestead exemption and why they think you will be in a 100% plan.

You can read about the California homestead exemption at http://www.leginfo.ca.gov/cgi-bin/di...04.710-704.850

The following says to me that the homestead exemption applies to jointly owned property. Even if there is non-exempt equity, a trustee can only sell the debtor's interest in the property. A partial interest sold separately from the whole will get a much lower price, even if the trustee could find a buyer. I guess if they trustee did sell your interest, you might have to pay 25% of the fair market rent to your new co-owner. But the coowner would also have to pay 25% of the property taxes, insurance and maintenace expenses.

704.820. If the dwelling is owned by the judgment debtor as a joint
tenant or tenant in common or if the interest of the judgment debtor
in the dwelling is a leasehold or other interest less than a fee
interest:
(a) At an execution sale of a dwelling, the interest of the
judgment debtor in the dwelling and not the dwelling shall be sold.
If there is more than one judgment debtor of the judgment creditor,
the interests of the judgment debtors in the dwelling shall be sold
together and each of the judgment debtors entitled to a homestead
exemption is entitled to apply his or her exemption to his or her own
interest.
(b) For the purposes of this section, all references in this
article to the "dwelling" or "homestead" are deemed to be references
to the interest of the judgment debtor in the dwelling or homestead.

Median income for a family of 4 in California is $77,596. So, if you can hold out long enough after your unemployment ends to get below median (maybe not an entire 6 months), a Chap 7 may be a better option if you don't have any other assets to worry about.

I suggest you consult with a few more attorneys.

[carolen]

thank you so much for responding. I will look for a few more to talk to. Both of the attorneys told me it would be awhile, maybe even months before I heard from credit card people..I am 10 days late to Chase (never been late before) and my last cc payment to wells fargo which was about 800 since I am now in a finance charge area did not quite cover all the new interest for the month maybe 20.00 and I noticed a phone call from them on home phone. Pretty fast!

[LadyInTheRed]

Both of the attorneys told me it would be awhile, maybe even months before I heard from credit card people

They must have meant it would be awhile be for they sued you. You will hear plenty from them. I answered one call from each creditor, told them I couldn't pay right now, was working on my financial issues and would know more in about 30 days. That way they knew they had my correct phone number. Then, I used call waiting and let the machine pick up their calls. Read the collections forum for more advice on handling the calls.

[justbroke]

The following says to me that the homestead exemption applies to jointly owned property.

I'm not too sure that it does, but I'm tired and it's late. It looks like 704.820 is talking about how the "interest" of a judgment debtor is sold when they don't own the entire property (have a shared interest in the property). It doesn't specifically go to defining homestead.

The easiest way to determine homestead in Florida, and California, is to see if the person filed for a homestead exemption and that it was approved.

I highly recommend an attorney because if the property doesn't already have a homestead status for the debtor, then the debtor may need to prove that it's a homestead. This is probably where the attorneys are having issues. That's why I'd first ask whether the debtor has a homestead exemption for the property. Pretty easy to check and/or to ask as it will be listed as such with the assessor of taxes.

[LadyInTheRed]

I'm not too sure that it does, but I'm tired and it's late. It looks like 704.820 is talking about how the "interest" of a judgment debtor is sold when they don't own the entire property (have a shared interest in the property). It doesn't specifically go to defining homestead.

I agree that it doesn't directly say that a jointly owned property can qualify for the exemption or define a homestead. Homestead is defined in 704.710(c) which is included in the link I posted. Ownership is not part of the definition. I'm taking the fact that law discusses what happens if the homesteaded property is owned jointly as evidence that jointly owned property can be eligible for a homestead exemption. But, I suppose joint debtors could all live in the house. I did read through that entire Chapter of the code and don't see anything suggesting that joint ownership prevents obtaining a homestead exemption. But, that doesn't mean there isn't case law or regulations saying otherwise. So, I did a little more searching to see if I can find a more clear answer. The instructions on the back of the California Homeowner's Exemption Form (form BOE-266) says: "To obtain the exemption, the claimant must be an owner or co-owner or a purchaser named in a contract of sale." Sacramento County's version of the form is at http://www.assessor.saccounty.net/co...sac_021448.pdf. [It's a state prescribed form, but each county puts out its own version with it's assessor's address. The contents of the form are the same statewide.]

The easiest way to determine homestead in Florida, and California, is to see if the person filed for a homestead exemption and that it was approved..

Yep, and if there is an exemption, the analysis of the law isn't necessary (unless the trustee or a creditor tries to show you are not actually eligible for the exemption). In California, if you have a homestead exemption, there will be a $7,000 deduction in taxable value on your property tax bill. If you don't have a copy of the tax bill, the info is available on many county assessor websites.

I highly recommend an attorney because if the property doesn't already have a homestead status for the debtor, then the debtor may need to prove that it's a homestead. This is probably where the attorneys are having issues. That's why I'd first ask whether the debtor has a homestead exemption for the property. Pretty easy to check and/or to ask as it will be listed as such with the assessor of taxes.

I agree an attorney should definitely be consulted. Nothing on this forum should be a substitution for the advice of an attorney. But, it's a good source to come up with good questions to ask an attorney.

[justbroke]

You got further than I did Lady. I did look in your original chapter reference and really didn't see homestead defined. If it's simply... mere ownership in California, that's great. In Florida, homestead is more than simple ownership.

I hope that they already have a homestead declaration filed. In Florida, our homestead exemption is $50,000. California, as such a progressive and liberal state, seems very... well... non-progressive in their homestead.

[catleg]

It's late here*, but if your credit isn't shot too bad yet, I'd think the best option is to take out a new first mortgage on the property to refi the heloc and the student loans. Then consider filing ch13 to deal with the credit cards. A lot will depend on how the family views the equity value of the house being split between everyone, esp. once your mom passes. Just a thought, I know it's kind of tough to talk about.

* meaning my brain may only be semi functional

[carolen]

Thanks to all who have responded. I am desperatley searching for an attorney. I looked at links and websites that advertise but I they all look the same! I must be missing something.
I want to know the person will fight for what I am legally entitled to, and not get me into a plan that is destined to fail. I live in Sacramento, Ca. so if anyone knows someone please let me know. thanks so much.

[justbroke]

Thanks to all who have responded.

Do you already have a homestead declaration for that property and are receiving the additional tax exemption? If not, you may want to start with getting a homestead exemption declared.

[carolen]

We have the homeowners exemption, and yes we do receive a reduction in our property taxes as a result of that.

[justbroke]

We have the homeowners exemption, and yes we do receive a reduction in our property taxes as a result of that.

Well, then that answers the question I had! "I" believe that you are entitled to the homestead exemption since your State/County has granted you the homestead tax exemption. You should be able to exempt "your" equity in the property in a Bankruptcy using the homestead exemption.

[LadyInTheRed]

Thanks to all who have responded. I am desperatley searching for an attorney. I looked at links and websites that advertise but I they all look the same! I must be missing something.
I want to know the person will fight for what I am legally entitled to, and not get me into a plan that is destined to fail. I live in Sacramento, Ca. so if anyone knows someone please let me know. thanks so much.

To narrow down your search, you could stick to certified bankruptcy specialist. Here's the results of a search of certified specialists is Sacramento County: http://members.calbar.ca.gov/fal/Mem...en=&x=131&y=12

According to the bar association "Lawyers can become State Bar-certified specialists (and advertise themselves as such) by showing that they have extensive experience and tested ability in their field of law." But, I wouldn't rule out an attorney only because he/she is not a certified specialist. There are excellent attorneys who decide not to go through the process. But, if you are overwhelmed with choices, this is a good way to narrow it down. Keep going to free consultations until you find an attorney you are comfortable with.