House for sale...if it sales before we file...

[berrymom31]

Were waiting to file for 6 months so I can quit my job and we can file for chapter 7. We are not making anymore house payments and are moving to a rental. We are going to go ahead and put our house up for sale....if it happens to sell before foreclosure and before we file...and we get some cash from the equity...do we get to keep the 15,000 that Missouri exempts? Should we hang onto it in case the trustee demands it? Were going to price it 15,000 above what we owe on it...and then hope to get 5,000 in cash out of it....we were hoping we could keep the 5,000....any ideas?

[FreshLikeADaisy]

Berrymom, I don't know the real estate market where you live, but I think it may take much longer to sell if it's anything like the rest of the country, so this may not end up being a problem you have.

As far as the exemptions are concerned, if the $15k is a WILDCARD exemption, yes, you can apply that to anything, including cash assets (like the $5k you speak of, above).

If, however, the $15k you're referring to is a HOMESTEAD exemption, you would not be entitled to any of it in this scenario, because the household itself would belong to someone else. If your house forecloses or is sold prior to filing, you can't take any household exemption on that house, because the equity you are trying to save from the trustee by exempting it doesn't belong to you when you file: it belongs to the buyer, or the foreclosing bank. If you are not yet foreclosed on the day you file but expect to be as soon as the mortgage co. applies for a lift of the automatic stay, then don't bother with the homestead exemption in that case, either: any equity you exempt is going to be lost in foreclosure anyway.

If you own another house that is now your primary residence, then you could take the homestead exemption on that house, but you said you're renting so that's not applicable either.

I'm not looking at Missouri's exemptions right this second, but several states offer an "unused homestead" wildcard exemption, which you *would* be entitled to if you were not trying to exempt a homestead. Whether you sell or are foreclosed, or plan to give back the house in bk, if the house will not be titled to you going forward then you should not claim any homestead exemption.

Does that make sense? Good luck!!!

[AngelinaCatHub]

My understanding, if you can use the money on exempted items; food, clothes, meds, etc. you can convert that. 15K is a lot to spend. You need a local lawyer for that question. 15K your lawyer would also be exempt. I wish I could help more but several more months on this site, I will be able to pass the bar. ‘Hub

[abp559]

In California the homestead exemption also applies to the proceeds of selling a "declared homestead" for up to six months, but I don't know if there's a similar provision in your state.

(Even if you're in California, don't take my word for it, see an attorney first).