Keeping the house

[sickandtired8]

I read in one of the posts that your house is not safe if you file Ch 7...is that true? I thought you could keep it if you filed a Ch 7. Thanks! S&T

[JRScott]

If depends on the circumstance.

You are in most jurisdictions allowed a certain amount of exemption for a residence (or homestead). So long as your current equity in the property is lower than the exemption allowance then you would probably be fine. You would have to sign a reaffirmation agreement with the mortgage holder, be current in your payments and that the reaffirmation agreement would not impose an undue hardship upon you. (If you file with a lawyer, he'll most likely handle reaffirmations, if you file Pro Se then you will have to appear before the court and show that it is not an undue burden.)

So yes you can keep your home , though there are circumstances you might not be able to. Make sure your payments are up to date before filing.

[familyof7]

You do not have to reaffirm but if you dont you MUST make all future payments on time or they will start foreclosure as early as 1 day after the missed payment the benefit to not reaffirming the debt is that if you do get behind or can no longer afford the home you can simply walk away with no money owed.

[brokeinmichigan]

We filed CH7 and kept our house. We have virtually no equity in it, but with one child being a senior in High School, decided to not move right now. We did NOT reaffirm, but we ARE making our payments on time. It's been no problem whatsoever with the mortgage company (CHASE)....except they filed a Motion to Lift the Automatic Stay in the very beginning...but from what I understand, that is just standard practice from mortgage companies. We pay, they send our next statement.

Hope this helps....

[razmom]

What if the house is paid off? Would the BK court expect you to mortgage it to pay creditors, instead of filing Ch. 7?

[HHM]

What if the house is paid off? Would the BK court expect you to mortgage it to pay creditors, instead of filing Ch. 7?

If the house is owned, free and clear, you probably want to look at other options beside chapter 7. (depending on the overall value of the house). On the one hand, no, the BK code does not expect you to mortgage your house, but the net result is basically the same in that, if you file BK with a house that is not exempt (i.e. equity exceeds your state's equity exemption), then the trustee will sell your home to pay creditors and you will have to find a new place to live.

Thus, the net result is, you are probably better off mortgaging the house to pay debt than filing BK because at least that way, you get to stay in the house.

[razmom]

Thanks, HHM. Their house (I'm asking for a relative) is in Texas, which from what I can tell has an unlimited property exemption...? (looked up on bankruptcyinformation.com). Does that mean the house, no matter the value, is completely exempt?

They haven't seen an attorney yet; I'm just trying to funnel them some info that might help their decision.

[HHM]

They should talk to an attorney in TX, Texas has some of the funkier exemption laws (and the federal BK courts don't like it). But assuming that there is an unlimited exemption in TX for home equity, then there house would not be touched in a BK, and assuming they meet other qualifications, they could discharge their unsecured debt in a chapter 7 and keep the house.

[Tikitrey]

What if I own my house free and clear and my state (az) has 150k homestead and the value comes in somewhere slightly above that..say 165k. Difference of approx. 15k. Don't I have the option to buy the difference back from the trustee and stay in my house instead of trustee just taking the home and selling it?

[Fallonedward]

We filed CH7 and kept our house. We have virtually no equity in it, but with one child being a senior in High School, decided to not move right now. We did NOT reaffirm, but we ARE making our payments on time. It's been no problem whatsoever with the mortgage company (CHASE)....except they filed a Motion to Lift the Automatic Stay in the very beginning...but from what I understand, that is just standard practice from mortgage companies. We pay, they send our next statement.

Hope this helps....

I'm in Michigan as well and I appreciate the info of NOT reaffirming, but making the payments on time. thanks

[keepmine]

What if I own my house free and clear and my state (az) has 150k homestead and the value comes in somewhere slightly above that..say 165k. Difference of approx. 15k. Don't I have the option to buy the difference back from the trustee and stay in my house instead of trustee just taking the home and selling it?

It may not be necessary. Most districts factor in the cost of selling a house. If that brings the price near the exemption level, the trustee will likely abandon any claom to excess equity.
You need to get an accurate appraisal and see exactly what the home is worth.

[mrskal]

What is the best accurate appraisal? I am thinking that an appraisal company is? I also have a question on that. Bear with me, LOL
My house on zillow is at 176
A friends house is at 150, we live about 4-5 mile apart, same county, same schools, etc. Their neighborhood has always been lower priced than ours, at least as long as I have lived here. 10 years, give or take.
They are trying to refi now, and told me they have had two appraisals through this refi process, and it is at about 200. Still have not been given the refi. from bank.
I had a realtor out that told me I could list at about 179, the houses that have closed in the last 2 months, same size, have gone for 150, 144, 135. I think there was one that sold at 170. Recent sales in their neighborhood range from 126-159.
How accurate are real appraisals? I know they really cracked down on all of that a few years ago.
I just dont see how they could get an appraisal of 200, really.

I am just grasping at straws here, I am about to go get my BK packet fromt he lawyer today, still wondering if just short sale is better and BK down the road if I have to. I only have 15,500 in CC debt, it is managable, may have to deal with deficiency down the road from the house. Then I think, I just want this mess over with so I can move to Florida where my husband has been working since February.
Thanks

[Pandora]

What is the best accurate appraisal? I am thinking that an appraisal company is? I also have a question on that. Bear with me, LOL
My house on zillow is at 176
A friends house is at 150, we live about 4-5 mile apart, same county, same schools, etc. Their neighborhood has always been lower priced than ours, at least as long as I have lived here. 10 years, give or take.
They are trying to refi now, and told me they have had two appraisals through this refi process, and it is at about 200. Still have not been given the refi. from bank.
I had a realtor out that told me I could list at about 179, the houses that have closed in the last 2 months, same size, have gone for 150, 144, 135. I think there was one that sold at 170. Recent sales in their neighborhood range from 126-159.
How accurate are real appraisals? I know they really cracked down on all of that a few years ago.
I just dont see how they could get an appraisal of 200, really.

I am just grasping at straws here, I am about to go get my BK packet fromt he lawyer today, still wondering if just short sale is better and BK down the road if I have to. I only have 15,500 in CC debt, it is managable, may have to deal with deficiency down the road from the house. Then I think, I just want this mess over with so I can move to Florida where my husband has been working since February.
Thanks

A certified appraisal - not a BPO - is the best type. Have the appraiser come INSIDE your home and walk through it along with the property. They will look at everything and ask alot of questions, measure the entire house and any outbuildings you have, etc. If you have a property plat, that helps as well. After the appraiser does their thing - they go back and start pulling comps to your house; houses that are equal in year, size, condition, and lot size to yours - both recently sold and currently on the market. They will also look at your county tax assessment to get a gauge, so its best to use an appraiser that is familiar with your area/county.

Places like Zillow or Trulia just are not accurate enough - to price your house they mostly use the public records (which are your tax records from the county). You can get a pretty good gauge of what your home is worth if you look at your property assessment - on it it should state if your county assesses at 100% of Fair Market Value or if they use a different percentage.

We just had our home appraised and it was 3% less than what the county assessed our house at back in January of this year - it coincided with the market, so our county assessment was pretty darn close to the value of the house. Well worth the $400 for the appraisers fee

[mrskal]

I looked at the fair market value on property tax bill, it said 256,344. What does that mean.
Thanks so much for your reply.

[Pandora]

I looked at the fair market value on property tax bill, it said 256,344. What does that mean.
Thanks so much for your reply.

it means the county assesses your house for the year, square footage, number of bedrooms, baths, etc - and lot size - at that amount. It doesnt mean its actually worth that amount, its just basing it off of how much it would cost to build a house similiar to yours $ for $ (based off of square footage) and how much the lot is.

If your county asssesses at 100% FMV, and that assessment is from January of this year - you can gauge it by seeing how much real estate in your area has fallen since then (ours is about 2-3% on average) and get an idea of its value. But for full valuation of the home, you need to have it appraised as mentioned.