Keep house in Ch.7

[SMinGA]

Sounds like your attorney thinks you have more equity in your home than you can exempt.

If you & your husband own the house together, you share the equity. If there is $50,000 equity for example, then $25,000 of it is yours. I believe the federal guidelines allow you to exempt (or keep) $20,000 of home equity. So anything over that amount needs to go to the trustee to pay creditors.

Since you can't withdraw that cash from the house, you'll need to find some way to pay the court for the value of any non-exempt assets.

[Mensa1]

Does it mean that we still have to pay our mortgages plus my husband has to come up with another 20K in order to keep the house?

Yes, that is exactly what it means. The 20K will go to the TT and then onto other creditors. This will have NO effect on your current mtg amounts.

[hcl]

So, if we won't have that kind of money (20K), trustee will sell the house, I will get the exempt amount (20K) and the rest will go to the creditors. I will loose the house...

[Mensa1]

Correct.

One exception could be that the TT might set-up a pymt plan for you so that you could pay the 20K over X months or a yr. Of course that is a lot of $$$ per month so likely not workable.

Your other choice would be a Ch 13 where debts could be restructured and in doing so you wouldn't lose the house. Of course this takes a regular income and the ability to make pymts to the TT. You should discuss this avenue with your Atty, if you haven't already.