House + additional lot on same deed will i lose the lot filing chapter 7 ?

[LaidOff53]

We have a mortgage for our House that sits on 1/2 acre plus an additional 1/2 acre lot ( which is our back yard ) that came with the house. they are on the same deed and the extra lot is listed as " parcel B " and then lists 2 different parcel numbers , we make 1 mortgage payment . We get seperate tax bills for each from our township . our equity exemption will be $40,400 on the house but does that mean the house only ? since the house and lot are on the same deed that our mortgager ( citimortgage ) holds would we get to keep the lot since its in with the house mortgage ? I hope im not to confusing . We live in Pa and due to a job loss feel the only option is chapter7 thanks in advance

[HHM]

Ohhhh, that is tough.

I suspect that if there are different parcel numbers, the BK court will treat it as 2 items of real estate. The catch, which may work in your favor, is the mortgage.

However, since the one mortgage secures both parcels, do you think you owe more than the two parcels combined are worth, if so, its a non-issue. Could the 2nd lot even be developed, is there any direct road frontage for the 2nd lot. If the combined parcels are not worth less than the mortgage, I am not 100% sure how this would play out. The trustee would ultimately have to pay/void the lien on the 2nd parcel, but I am not sure what legal mechanism he really has to do it.

What you may want to do before you file BK, (but it could take some time) is petition the county to join the parcels. Doing so would not be an issue with the BK because both you and the mortgage company are treating the parcels that way anyway.

I would double check county records to see if Citimortgage has actually filed a deed of trust (or mortgage, or whatever your state uses) on the 2nd parcel.

[LaidOff53]

We owe $128,000 on the mortgage ( house + additional lot ) the lot has no frontage and cannot be developed , so im not sure of the value . we refinanced 5 years ago and at that time the properties were appraised at 190,000 which was HIGHLY inflated , we had a mortgage broker that took care of everything and the only way that we found the appraisal amount was a fews weeks after we were given the mortgage i requested a copy of the appraisal from our new mortgage company , I know now that the mortgage broker we used was shady, i remember like 6 months after finding out i decided to call the appraisal company and ask how they came up with that amount only to find out that they had gone out of biz . now i know that there is noway its worth 190,000 even now, but im worried that citimortgage has it on file its worth 190,000 so they think that there is 60,000 equity paid into it , which i know better than that , so would i have to pay for an appraisal to prove its not ? This whole thing has my mind spinning. I work for the county i live in so i dont want to file a chapter 13 cause EVERYONE would know !! so we were hoping to do a chapter 7 and be done with it. There are no jobs right now so my husband's 24 years of experience in the steel industry is probably going to be unemployed for a long time and i know that its ony a matter of time before we cant pay the credit cards !

[jeb]

I think H has it right - see if you can combine the two parcels if you need. Your Attorney should be able to know what might work in PA. - jb

[HHM]

If the lot cannot be developed, you could simply value it at zero, or some token amount and see if the trustee dispute the valuation. If the parcel has no road frontage, and would require ingress/egress rights through your parcel to get to it, that piece of land probably has zero value. Thus, it may be a non-issue.

This would probably be a unique issue for most BK lawyers. But, bottom line, it is an asset and there are two ways to handle it.
1. Exempt it
2. Value it at some small amount or zero and fight the trustee.

Also, don't worry about that previous appraisal, it is moot. Hell, any appraisal that is 6 months old is moot

[LaidOff53]

HHM Thanks so much for the info !
I dug out this years real estate tax bill and the lot " Parcel B " valuation is $2500.00 and that amount is from 1994 which was the last property assessment , so i know there is not much value to it because there really is noway to get to it to develop it as there is a housing plan behind it and our house is in front of it.
But here is another question ... lets say that we list it as being worth almost nothing, but the tustee says it is and needs to be seperated from our mortgage and sold and spread among the creditors , can we pull out of the bankruptcy all together ? i mean once we start this can we stop it ? i know thats probably a silly question .
also.. is the amount of equity allowed in our house ( in our case 40,400 ) just for the home or can it include any property like the lot ?
Again thanks for taking the time to answer my posts :-)

[HHM]

What you would do at that point is enter a short payment plan with the trustee to buy the value of the non-exempt equity.

But when it comes to chapter 7, you cannot stop it once it starts (at least, not without good cause).

You should hire a BK attorney to represent you, and probably a slightly higher-end firm.

[PoorGrammyinBK7]

I would think that if it can't be developed the trustee would have a really hard time trying to sell it, wouldn't he? Who would want it? Maybe you wouldn't have to buy it back - he might abandon it.

[LaidOff53]

Thanks Grammy
Thats what i am hoping but i am kinda freaking out because it seems that i have to file the 7 first and then pray that the trustee wont take it to sell , It is literally our back yard ! as I stated in earlier posts there is no access to it unless you go through our property , it is on the same deed and mortgage as as our house , Its listed on there as " parcel B " it seems like a gamble and i am no gambler !! All i know is that there is no work to be found in our area and my husband has been on unemployment for 4 months and time is ticking away to the day we will not be able to pay these darn credit card blood suckers !! I feel things closing in on us :-(

[Willy13]

If the lot cannot be developed, you could simply value it at zero, or some token amount and see if the trustee dispute the valuation.

I have a simular ajoining lot that I had perc tested and it failed because it is too close to a neighboring well. That brought the value down from about $100,000 an acre to $4000. If you can't even access that lot then I would think it won't be worth anything to a trustee. Other than a neighbor, who would buy it from him? You may want to check into that regardless of bankruptcy and possibly save yourself some propert tax. You can later join the properties and then get full value if you want to sell. Me and one other neighbor in my area have the same setup. Saves us each close to $2000 in property taxes on our 2 acre lots.

Ooops,
I just saw you value of the property looks like it may be already devalued. I still would check the value of it at todays prices.