Selling Price for Home

[nohope]

Have equity in home and been told I should file a chapter 7 as I can't meet my obligations. Also told trustee will set price to list/sell house. Do you have any control over that price? actual selling price? Will it be sold at a price that just covers what I owe (plus the NJ exemption)? Was told trustee will set a price so it sells very quickly.

[SMinGA]

If the trustee sells your home, he or she will start with an offer based on market conditions. (Probably at the advice of a realtor.) After that, its all a negotiation between buyer or seller just as it would be any other time. Seller asks $X, Buyer offers $Y - they either work it out somewhere in the middle or they don't.

[nohope]

Thanks for that information. I probably have about $150K equity in my house after it's sold and my debts (substantial - $500k including mortgage) are paid if it sells at fair market value - lawyer told me house will be listed much lower so that it sells fast - (leaving me with little money after since he said it would be listed at least $100K less than fair market value). Was told that I could save my income (minus expenses) during the process of house getting sold. Got in this mess due to medical expenses and reduction in income.

[despritfreya]

This sounds stupid. If the house is to be sold why don't YOU sell it for its fair value (not some deflated value), use the funds to pay creditors (negotiate a lower amount?), use your homestead to get into a new home and not file bk? How much do you owe to your unsecured creditors?

Not only is a Trustee going to undersell, he takes a cut of the sale proceeds for his fee so, even less goes to creditors. The Trustee, however, must give you your allowed exemption before he can give any $$ to anyone else.

[tobee43]

also...nohope...as long as you are surrendering the house in the BK...and the mortgage is listed on the petition you are covered for any and all cost to do with the sale of the house. nj is a creditors state....and one of the only states that has an unlimited about of fees that can be added to home sales and foreclosures...i know a woman that filed bk in nj after turning over her house to the bank and they sold it and then billed her the foreclosure fees AND the difference in the mortgage balance and what they sold it for...she owed over 150k on house by the time she was done in fees and the house was only a little 170k cabin in the woods....go nj!! that's why we LEFT!!!

believe me...they most likely can't sell it...our property is in nj and although you may have been told there is equity....there is NO equity when there is NO sale it's like X% of ZERO is ZERO....although with us our house was underwater over 250k...so there were no questions there.

good luck...and have your atty work on getting that price DOWN....

[nohope]

Houses aren't selling quickly - was previously(one year ago) told by two other lawyers not to sell the house - well now it's past that, due to the debt I've incurred and that I can no longer meet my monthly bills. It does seem like all they're interested in doing is selling my house (and to who?) get the creditors all if not all they're owed and I'll walk away with little ($20K in NJ).

[tobee43]

I'll walk away with little ($20K in NJ)

i'm not certain about that in nj...it's not a homestead state and the chapter 7 trustee could distribute the funds....that's why you need to talk this over more carefully with your atty...our nj house it was best just to walk away...forget even if there was equity....let them have it and pay for the heat bill!! LOL!!!

[despritfreya]

"i'm not certain about that in nj...it's not a homestead state"

Wow, you are correct. No homestead in NJ. This is a reason not to file bk. Depending upon the equity and the amount owed, I think it would be better for the OP to sell on her own, pay her debts and maybe pocket a few bucks. Darn sight better than just giving away the farm to a Trustee - at least I think so. Wonder how much debt we are talking about outside of the mortgage(s) on the property.

[nohope]

What are you uncertain about? I've been told the homestead exemption in NJ is $20K - not much.... I'm not underwater with my house - for many years I paid a mortgage and the equity grew - I got a serious illness, am now disabled, am the single mom of three children (been divorced for years) and had a reduction in income. You're correct that NJ is a very expensive state to live in - no one can believe what I pay in property taxes (they've doubled in 10 years) or what I pay for car insurance ( can't afford to put my kids on my policy - it's an extra $3000 for just one of them).

[despritfreya]

Nohope,

I looked on my bk software program. It shows no NJ homestead. HOWEVER a quick Internet search shows that you can elect Federal Exemptions. If that is correct then you can declare a homestead up to the Federal allowance. How much unsecured debt do you have?

[tobee43]

nohope...


FACT: nj IS NOT a homestead state...you cannot homestead your home....they can sell it and distribute the funds to your creditors.....honestly.

yes, i would aboslutely opt for the federal exemptions if i had fied in nj...which I DID NOT....then you can keep your house etc....however, depending as well, what the trustee says, they can, depending on your situation, which is at this point not really clear, SELL the house and distribute the funds to your creditors...it's what the new laws were all about....additionally, they may pull you into a 13 if you have too many assets.

[nohope]

just wondering - if you walk away from your house - what happens to your other debts - medical bills, lawyers bills, credit card debts, etc. - might they become judgments? so now there's no house since you walked away and the bank gets to sell it for whatever they want (only owe less than half of what it's worth so I guess they probably only want what is owed to them) and those other debts still remain.

[despritfreya]

Nohope,

If you walk away and do not do a bk, at some point the creditors will sue you, obtain a jugment and then proceed to execute on the judgment against non exempt property under NJ law.

I am still curious. How much do you owe to your unsecured creditors? Is there enough equity in the home if you sell it (after payment of the mortgage, closing costs, commissions, ect.) to pay all of your other debt? If so, why are you looking at bk since you are of the mindset to allow the home to be sold? Is it just that you would rather move on and therefore turn everything over to a Trustee?

[tobee43]

nohope...no......we surrendered the house and a car to the state credit union up in nj.....we listed all med bills...lawyer bills...cc's...we listed everyone and their mother.

no, they cannot become judgements after or during your filing. even if they got a judgement, you can have them removed once your chapter 7 has been discharged. it cost a bit more for atty fees...but well worth it. we didn't have any judgements...at least not that we know of since they couldn't locate us. doesn't mean the courts in nj which are so off the wall didn't grant them..i'm waiting to see in 3 months i'll pull my report and hire an atty if i see any judgements and have them ousted.....but actually we didn't give them much opportunity to file anything. we did pay everything except our mortgage until we retained an atty....then you get a "stay" and you are NOT allowed to pay, nor are the creditors allowed to go after you in anyway...they would be in violation of the law.


now...if you surrender you house and lets say you owe them 300k and then sell it for 100k and don't file in nj they can go after you for the difference......AND.......all forclosure fees...and good ole jersey....also one of the ONLY states that doesn't have a CAP on foreclosure fees which could go as high as between 50-100k!!! however, in a chapter 7....they are all discharged. the ONLY thing you would be responsible for would be i.e. you lived in an HOA community, until they sell it they can and will come after you for all back dues.

[nohope]

doesn't filing bankruptcy stop all those fees you mention?