too much equity

[notalooser]

my husband and i were on track to file chapter 13 about 1 1/2 years ago. the week before we were to file, my husband lost his job, and therefore, we couldn't make the payments. we put the 13 on hold (we don't want to surrender our home!) and decided to wait it out. our lawyer was a jerk anyway

we are now ready to file again, and we have consulted a new lawyer, since our previous one won't return our calls, even though we paid him in full for the filing, but i digress. 1 1/2 ago, we got an appraisal at $178,000. the appraiser didn't even come in house, just walked around the property. there is no way our house would sell for that much! we bought it 10 years ago as a foreclosure property, and it needs alot of work. the attorney we just met with "recommended" a broker that knows what she's "looking for." but of course, we can't get ahold of him. we tried every day, several times a day last week. we're hoping he was on vacation and will be back to work tomorrow.

right now we owe $100,000 on the house, so anything close to a $178,000 appraisal is not going to work in our favor (deducting our homestead exemption, that would be $68,000 we'd have to pay over 60 months) we're hoping to get an appraisal around $130,000. has anyone run into this problem of too much equity? and is there any way to get a low appraisal? and do trustees want a copy of the appraisal, or do they just ask how much you think your house will sell for? we're hoping the broker appraises the house at what we could sell it for if it had to be sold in 60-90 days.

thanks everyone. i'm just about to loose my mind over this financial mess we've gotten in. and like alot of people on here, all of our debt is from a failed business, times of unemployment and using credit cards to pay for oil for heating and car repairs. we were not trying to keep up with the jones', we were just trying to get by. i feel like such a looser.

[tothelimit]

When we filed our attorney was just able to go online and see what houses in our area were worth. I think he used zillow. Anyway he told the trustee that's where the figure came from and the trustee was satisfied.

[keepsmiling]

Same here. It's very hard to get realistic comps with the huge number of foreclosures for sale. You can try looking at recent sales and sort of extrapolate from there, but without knowing what kind of shape the house was in, it's difficult. You know the buyer will ask for all kinds of concessions at closing if there are issues. So you must insist the house be in "as is" condition for sale.

The "appraisal" you got was bs if no one ever came inside. Realize that that agent probably highballed you to get you to list with him/her.

Zillow can be WAY off depending on the condition of your house, usually will give a high and low range in their quote. Call an agent and have them walk around INSIDE the house and be sure to point out any issues and let them know you need a fast sale. That's a starting point. while you are waiting for the lawyer's agent, and it couldn't hurt to get a few of them anyway. Depending on your state's exemptions, I think you stand a reasonable chance of coming out ok. Remember that there are commissions that need to be paid as well. Trustees know as well as the rest of us what the state of the market is.

[jmh]

Just something to consider:

In Feb. 2007 when I filed for my Ch. 13 I had the same exact problem. My condo was supposedly worth $159,000, but needed repairs (and still does). The mortgage balance was a little over $70k. Of course a lot has changed over these past few years, and since I've spend 4.5 years putting all of my disposable income toward my 13, I haven't been able to do any work. And an as-is sale is problematic as there are too many comp units in my development that also need renovation. For the time being, I'm essentially a prisoner in this house for a little while. My home is worth around $85k if fixed up, but I can't fix it up.

I had to get and file a formal appraisal with the trustee, which effectively meant choosing between retaining my mortgage and paying 100% in a Chapter 13, or letting the place go by filing a Chapter 7. If there's not much appraised value beyond your exemption it's unlikely the Trustee will mess with it. Just be prepared for a number you may not like.

What I'm getting at is this: If your house needs a lot of work that you don't reasonably think you can attend to any time soon, and you don't have a lot of "real" equity, weigh your options carefully. I don't know what your debt looks like, but selling out of your home and using the proceeds to pay of your debt--which you can often negotiate--could be a good option and help you avoid bankruptcy entirely. Or, simply surrendering your home might not be the worst thing if it's a burden.

In my case, even if my home was worth $25,000 less than it was appraised for, I could have done that. My $30,000 debt would probably have been talked down to $20,000 or less, and I would have avoided $4,000 in attorney and Trustee fees as well. And, I wouldn't have had to file for bankruptcy at all. But I didn't, and now coming out of my Chapter 13, I have to come up with $15k to fix my place up. I can't invite company over with the work needed, it will take a while to save up, and it will be a while before I can secure a loan to help.

At the end of the day though you're at the mercy of the appraiser & the Trustee. Offhand I can tell you that your appraisal is probably high, since the market has continued to plummet over the past 1.5 years, and condition wasn't taken into account (if they don't go inside, it's not an appraisal, it's a guess). But if it comes back at $150k, that could be a problem for you.