Having a brain fart.....

[CoBelle]

In a chapter 7, if the Trustee abandons your home, how do you avoid the liens that are impairing your homestead exemption?

Is there a point of no return after you file a 7 that you can't get it dismissed? (I'm wondering because a 7 really can't do much for me. I have only filed the emergency petition and the rest is due on Monday. My 341 is Dec 6. I find out if the stay is continued on Nov 23 and if the trustee will abandon the house shortly thereafter.

[tcreegan]

Hi CoBelle,

In a chapter 7, if the Trustee abandons your home, how do you avoid the liens that are impairing your homestead exemption?
....by paying them off. If the trustee abandons the house, you get it back, do what you want with it. The lien holders can force a sale to recover their collateral. 1st lien gets paid, 2nd gets paid, and you get whatever is leftover.

Is there a point of no return after you file a 7 that you can't get it dismissed?

1. You have to file a motion to show cause to get it dismissed. The judge agrees or disagrees.
......or............
2. Fail to turn in the required documents, the trustee can move to dismiss, judge agrees/disagrees
.........or...............
3. The trustee can make a motion to compell you to turn in the docuemnts, judge agrees/disagrees


If you get dismissed, there is a wait period b4 you can file again (I think it is 6 months) and the stay is only 30 days so you have to file for an extension.


Good luck w/ this, I know it has been rough on you....

Tom in Colo

[tcreegan]

forgot part of answer A......liens against your house survive the BK, your personal liability for the debt is gone but the liens stay, they are unavoidable. They get paid at time of title transfer.

[keepmine]

Wait a minute. If the lein is judical lein-say a cc company sued and place a lein against your house then, 522{f} of the code allows for the lein to be stripped if, it impairs an exemption you'd ordinarly be entitled to.
If the lein is a run of the mill first mortgage then that lein does survive bk.

Why did you file a CHapter 7 if it wouldn't help you?

[tay666]

Wait a minute. If the lein is judical lein-say a cc company sued and place a lein against your house then, 522{f} of the code allows for the lein to be stripped if, it impairs an exemption you'd ordinarly be entitled to.
If the lein is a run of the mill first mortgage then that lein does survive bk.

Exactly. I had a judgement lein stripped from my home.
It costs extra, as it is a completely different case.
And according to my lawyer it can only be done during the bankrupcy. So I had the money for him within a month after our 341 so he could get the case filed.

[keepswimming]

This is a little confusing to me, too. We are filing FINALLY tomorrow! After going through a move across country, and waiting out the 90 days we had to in order to file, we now have three liens on our home that is for sale. The home has an offer on it now, which is being considered as a short sale with skank of america. so we are filing for now and checking the REINSTATE box, and waiting to see if the sale goes thru. If it gets botched, then we will then surrender. In order for the sale to be accepted with skank of america, they say we have to take care of the three liens ourselves. (even though one of them is for the appliances that are IN the home)...anyway, if we file bk, the debts will go away, but in order to get the liens removed what do i need to do? oh, and two of the three are now filed thru our current state as well, apparently.

cannot wait to get this over with!

[tcreegan]

Hi keepswimming,

a short sale with skank of america. so we are filing for now and checking the REINSTATE box, and waiting to see if the sale goes thru.

...hmmm....the options are reaffirm, redeem, or surrender....reinstate = reaffirm ?

Once you file, the house becomes property of the BK estate. The short sale goes out the window, any sale would have to go through the BK trustee. Reaffirming is a really, really bad idea so we won't even think about it....

anyway, if we file bk, the debts will go away, but in order to get the liens removed what do i need to do? ...you don't have to do anything, it is now BoAs problem, they have to deal with it.

Get out, make a clean break, enjoy the fresh start...

Tom in Colo

[HHM]

You can only avoid judicial liens on real estate for impairing an exemption 522(f)(1)(A). Which means judgement liens. Any other liens on real property cannot be avoided on the ground that they impair the homestead exemption.

To the rest of the responders, go back and read posts under the username ColoradoBell, this situation is exceedingly complex.

[keepswimming]

tcreegam: thanks for the response. yes, i meant reaffirm, and realized i typed the wrong term as soon as i sent the post off. i have been advised that we could reaffirm, but wait to see if this short sale goes thru, and since we have 60 days to feel that out, then we can change to surrender if the sale does not get approved. as much as i want to just hand it all, liens included, back to bofA, from what i have seen it could possibly be better for us in the long run if the home sells as a short sale rather going going to full foreclosure --- we are filing tomorrow, so i sure wish my attorney knew more about all this and had better answers for me.

as for the liens, from what i have been told, the bk will make us not liable for the amounts due (about 11K in all), but to get the liens stripped will cost 250 per lien to have done, and b of a will want that done if the short sale is to happen. i know i am probably wasting my time and effort to try to make it work out "just a little better"...but i guess i don't ever want to be able to say that we didn't go down swinging. HHM, i will go read more of colorado's post(s) and try to find out more on this 522. I wonder how it plays into our case, and colorado's as well.

[debee]

skank of america

lol. new one for me.

[keepswimming]

as much as i want to just hand it all, liens included, back to bofA, from what i have seen it could possibly be better for us in the long run if the home sells as a short sale rather going going to full foreclosure

...

I am so skeptical toward b of a...they want me to get rid of liens to "proceed with short sale"...But, they could at any moment foreclose, and with the liens gone, that would help them immensely. Is there any benefit of reaffirming now? What are pros and cons? We may have to change to surrender before our hearing, but for now is this the best option? If the short sale completes, we strip the liens, and we complete the bk without a foreclosure, is that "better" than just surrendering now, when we file?

Sorry if this is posted in the wrong spot. It's all so woven together right now my head is spinning.

[HHM]

You absolutely do not want to reaffirm. The only way you would reaffirm is if the reaffirmation agreement contained new, favorable terms for the mortgage. Even then, you probably wouldn't want too.

[keepswimming]

Wow, thanks, HHM. I wonder why my attorney has not advised me in this manner, with this much assuredness. So if we do not reaffirm, then I wonder if the short sale will still continue?

[jcj112562]

So if we do not reaffirm, then I wonder if the short sale will still continue?

Once you file BK and discharge, why would you even worry about the short sale? It becomes B of A's problem, not yours. If the short sale falls through, you are going to surrender...why not just surrender in the first place, besides a sense of responsibility for the building that you currently own? Home is where you make it, and as far as I can tell, the proper business decision is walk, and do not reaffirm. There is a reason why, in pro se cases they make you go before a judge to reaffirm.

John

[tcreegan]

is that "better" than just surrendering now, when we file? ....no

I second jcj, no reason to do the short sale, the only person it benefits is the real estate agent who makes the commission. It will not help your credit, the BK took care of that. The lender loses money and you don't get anything.

Besides, once you file you need the trustees permission to do anything with the house and the trustee won't do anything with it unless there is $$ to distribute, which ain't gonna happen in a short sale. What is marked on the statment of intentions doesn't really matter, to reaffirm (really, really bad idea) you have to sign new papers with BoA and get them approved by either your lawyer (good ones won't) or the BK judge who won't be impressed by a house w/ 3 liens, no real equity, and is only going to a short sale anyhow. Ain't gonna happen..

Forget the short sale, throw it into the BK to be discharged liens and all, live there payment-free until it gets foreclosed on and bank the payments to pay for your post-BK life!!

Tom in Colo