House/ Car equity

[anussia]

I'm planning on filing in a month, if possible. I'm a bit scared because we don't want to lose our house and car. We live in Illinois.We spoke with a lawyer a few weeks ago and at the time we had a car worth about $2000 99' civic and a truck 03 toyota worth about $8000. We just traded the truck in for a 06 4runner since we needed to buy another car in the near future (more friendly family car), equity in the truck might force us to give it up and interest before bk would be a bit better (lawyer said that was OK to do). I'm worried now that we still might have equity in the new car and that they might want to take it, about 21,000 on NADA financing 17500. Also our house has about 30,000 in equity (zillow.com) and my husband is the only one listed on the house, so from what the lawyer said we can't double the exemption. What he suggested is adding me onto the house but doing it as a elder will/trust package so it doesn't look like I'm just doing it for the BK. More for family; 2 year old son and husband working a dangerous job currently (scaffold). We would like to file ASAP since we want to count my husbands unemployment and he's also worried that he might get some overtime soon. The best time for us to file would be May since that would put us at about $26000 for 6months. Currently he's making 6400 month and the longer we wait we might not qualify. So my questions are: How do you think they will look at the house and cars since we still want to keep and make payments on? Will the trustee allow be ok with my name added onto the house so close to the BK? Would it be ok to file so close to buying a new car? If the trustee feels we have enough equity in the house for him to take, is there anything we can do to still keep it? go for chapter 13, pay the trustee... I'm going to see yet another lawyer tomorrow so we'll see what he says but I would like to hear from you? Please help.

[StartingOver08]

I am glad you are interviewing other attorney's for your BK. I am a little concerned that your attorney would suggest adding you to the house deed so close to filing Bk.

As to the house value - Zillow is not very accurate at all in today's market. Better to get a CMA from an experienced real estate agent (they are free) or to get a professional appraisal (this costs money). Make sure you only use sales for comparable homes sold within the past 90 days.

As to the new vehicle - what are your exemptions allowed for IL? If you don't know, check here: www.legalconsumer.com (Go to your states exemptions)

This is the place to plan your BK so you know what to do.

[anussia]

If I don't add my name and the equity is around $20000 or a little less but still over the allowed 15,000 what would happen in that case? The car exemption is $2400.

[StartingOver08]

Well according to legal consumer, husband and wife can double the exemptions:

Real or personal property including a farm, lot, & buildings, condo, co-op, or mobile home to $15,000 (husband and wife may double); sale proceeds exempt for 1 year
735 Ill. Comp. Stat. 5/12-901
735 Ill. Comp. Stat. 5/12-906

Plus you have a wild card exemption: 4,000 of any personal property (does not include wages)
735 Ill. Comp. Stat. 5/12-1001 (b)

Car exemption is $2400

Motor vehicle to $2,400
735 Ill. Comp. Stat. 5/12-1001 (c)

Did you buy the car already? If so, I doubt that you have equity in it - because once you drive off the lot the car depreciates immediately. Find out what it is worth using NADA or KBB. Some districts require retail values others are more realistic. If you are in one of the districts that require retail - you can get an independent professional appraisal of the vehicle if you have purchased it already.

Please interview more attorney's for your BK.

[anussia]

Real or personal property including a farm, lot, & buildings, condo, co-op, or mobile home to $15,000 (husband and wife may double)
Would that mean that even if I'm not on the house and since we're married that we would qualify to double?

Yes we did just buy but we had a $7500 trade in. I think we might be ok with the cars now I'm just worried about the house. Also we are getting a $6500 tax return that we expect to get any time now. Would it be ok to spend that money on 2 mortgage payments $1200, second mortgage $450, Lawyer fees $1500 that would take care of about $4800. What else would be ok to spend on? Would getting a lawn mower be ok? We need one this summer.. Small home repairs? Spending this might take us right into May, when we plan on filing would the trustee see a problem with this? Thank you so much for your help.

[DaisysMom]

I live in Ohio and am pretty much in the same situation, housewise. I am on the deed and my husband is not. My attorney said that because he is not on the deed, we can only use one exemption. Because of this, I had to pay to get an appraisal done. We are very close to being over the exemption amount. I should get the results in the next few days...it was done Saturday before last.

So check on that with your attorney. In Ohio both have to be listed on deed or both exemptions cannot be used.

D.....

[lalap123]

Hi,
I have the same worry as you about keeping our house, as we have quite a bit of equity in it. Zillow states the value as $253K, but it is not accurate and I've even read that some trustees won't look it and want a certified appraisal. We had an appraisal done last May for refinancing and it came back at $250K, therefore with the market tanking over the past year there is no way it could still be worth that. Even if the appraisal comes back at $240K we only owe $202K so there's no way we won't have any equity, as housing around here hasn't been hit as hard as other areas of the country.

I am on the deed but not on the mortgage, and according to the attorney that I'm planning on using (not filing until September) the trustee will most likely not move to seize the house. The way I understand it is, if the appraisal comes back showing some equity, the trustee will first off decides whether or not it can sell quickly in the current market, what repairs would have to be done to get it to sell quickly, and how much would be left after realtor and other fees are subtracted. If there is still equity and he wants it, my attorney said that in his experience the trustee almost always either will let you pay it in a lump sum or even over several months to one year in installments. This made me feel so much better about having an appraisal done six months from now (the only time I've ever hoped the market doesn't come back up!!)

The car probably falls under similar practice - unless there is a substantial amount of equity and the car could sell easily then you are probably okay. If you really wanted to keep it you could maybe offer to pay the equity directly to the trustee.

I am in the northern district of GA so keep in mind that this is how trustees apparently work around here. You should ask the attorneys you meet with how things tend to go in your district to be sure. Good luck.