For those ch7 filers w/ real estate equity

[lalap123]

Hi,
I'm planning on having an appraisal of my house in the next week as I prepare to file ch 7, but what are the odds that the appraiser will give me a low-ball estimate for BK purposes if I ask him to? I can only exempt 10,000 as an individual filer, so of course I'm very concerned that the trustee will want the house. Anyone have direct experience w/ this? I am in Georgia. Here are the details:

Tax assessed value $260K
Re-fi appraisal in May 2008 $250K
We owe $202K

My questions are:

1) Should my husband take out a HELOC and use part of it to up our equity (he is not filing w/ me). I'm not going to file for another 3 months...would this raise a red flag?

2) How often will the trustee move to seize the house over less than $5K or $10K in equity? Wouldn't he always give us the option of giving him the cash instead?

3) In your experiences, how often does the trustee question or do back-up research if I have an experienced appraiser's statement that the value of my house (w/ repairs, new paint and carpet) is X amount? Do they *always* check Zillow or the tax assessment value? I would think that it would make more sense to take a real appraised value several months prior to filing than it would be to take the tax assessed value, but then again if he wants the money can he argue for the 260K? Could we fight this and have the judge rule in our favor?

Thanks for any insights...

[HHM]

Get a new appraisal, any appraisal that is older than 3 months, is no good.

And DO NOT TAKE OUT MORE DEBT just to eat up equity.

[TEW]

The trustee does BK’s everyday and has seen it all.
There were 2 cases before mine at the 341 that were continued for appraisals after the people told him they used Zillow to come up with the value of their home.
You can redeem the house back from the trustee if you can afford it.

[ansky0007]

Hi,
I'm planning on having an appraisal of my house in the next week as I prepare to file ch 7, but what are the odds that the appraiser will give me a low-ball estimate for BK purposes if I ask him to? I can only exempt 10,000 as an individual filer, so of course I'm very concerned that the trustee will want the house. Anyone have direct experience w/ this? I am in Georgia. Here are the details:

Tax assessed value $260K
Re-fi appraisal in May 2008 $250K
We owe $202K

My questions are:

1) Should my husband take out a HELOC and use part of it to up our equity (he is not filing w/ me). I'm not going to file for another 3 months...would this raise a red flag?

2) How often will the trustee move to seize the house over less than $5K or $10K in equity? Wouldn't he always give us the option of giving him the cash instead?

3) In your experiences, how often does the trustee question or do back-up research if I have an experienced appraiser's statement that the value of my house (w/ repairs, new paint and carpet) is X amount? Do they *always* check Zillow or the tax assessment value? I would think that it would make more sense to take a real appraised value several months prior to filing than it would be to take the tax assessed value, but then again if he wants the money can he argue for the 260K? Could we fight this and have the judge rule in our favor?

Thanks for any insights...

You would be fine... Our house was appraised at $470,000 and we owed $400,000 - Since we filed as a married couple we used the $20,500 x 2 exemptions to cover $41,000 of the equity. There was only $30,000 left and if the trustee had to sell the house it would have cost them around 10% in realtor fee's etc. so after paying us back our exemptions and selling fee's there was nothing left for the creditors. After the trustee went and revalued our property and came up with around the same value he abandoned the property.

In your case at $250,000, It would cost the trustee around $25k to sell the house and if you are entitled to the same federal exemptions there again would be nothing left for the creditors so you should be fine.

[lalap123]

Another question please...

Where are you getting the 10%? I was under the impression that the realtor fees are typically 4-6 percent (and even less now that houses are sitting on the market so long).

Also, did the trustee not require you to pay him the equity that would have been left? In other words, he could have chosen not to sell the property and you should have owed him the difference b/t your exemptions and the value (around 30K)??

[lalap123]

Also...question about Zillow

Is Zillow considered to be grossly inaccurate...and if so is it considered to value properties higher than it should or lower?

[ansky0007]

Where are you getting the 10%? I was under the impression that the realtor fees are typically 4-6 percent (and even less now that houses are sitting on the market so long).

Also, did the trustee not require you to pay him the equity that would have been left? In other words, he could have chosen not to sell the property and you should have owed him the difference b/t your exemptions and the value (around 30K)??

10% was approximate fee's, It covers everything from selling the house, preparing it, maintenance, etc. till sold.

No, We did not have to pay them anything. Since they could not sell it and have anything left over to pay the creditors the home was abandoned back to us. This was exactly the outcome our lawyer told us would happen.

Now if the home appraisal came back higher than expected... In my case lets say $500k, That would be $50,000 selling fee's, $41,000 (Our exemption) with $400k owed that would leave $9,000 profit left. They would take the house and sell it or give us the option to come up with $9,000 to keep it.

Get a real current appraisal, Our appraisal done 1 month prior to the 341 was at $460,000, The trustee revalued it at $471,000 so they must have ordered their own appraisal but their number was still good enough to force them to abandon their interest in it.