statement of intention

[lamdis]

i'am filing chapter 7 indivually ; I'am Co-owner of a primary property but the other co-owner is the only one on the mortgage; we are current on the mortgage , there's no equity on this property and we intend to continue with the payments; my question relates to the statement of intentions given that the mortgage is not mine: how do I fill out this form given that I don't need to reaffirm a loan that is not mine, and do I name a creditor that is not one of my own? I'am baffled by this; maybe you can help me..... thanks

[dneil]

are you only on the deed???

[lamdis]

statement of intention reply

yes I'am only on the warantee deed together with spouse.
thanks

[tobee43]

it's really not a good time for your to transfer any deed at this point.

this could and may be a problem IF the trustee feels there is any equity in the property. the bit of bad news about this, is, IF and ONLY IF the trustee feels there is indeed some equity they can force the sale of the property or allow the other owner to "buy" out your share from the court...it's sticky and not a good situation.

if it were me....i would quit claim the property and wait two years to clear all the courts questions...however, i'm certain, you will not be able to do that...so ...you really need to speak to an atty with respect on how to protect the co owner of the property....also...if you can for "certain" prove there is no equity...you should be alright, however, once again, it's difficult to tell what a trustee will or will not do..

best of luck and keep the board posted!

[tcreegan]

Hi lamdis,

Statement of Intentions is not real critical, almost a formality. Check 'retained' and use the 'other' line to explain.

More importantly how did you handle Statement of Fin Affairs 3(a), schedule A, schedule D, and just to be safe schedule H ?

And probably most important, if you were over-median, how did you handle the mortgage expense on the means-test?

And as a side note, what to put on schedule J...

And all that being said, had a lawyer say it would be very rare for a mortgage lender to not have everyone on the deed also as a guarantor on the loan. Had clients 'not on the loan' suddenly get on the hook after the person 'on the loan' defaulted. Said it might be a clause buried deep in the contract.

Might not be your case at all, but I thought I would mention it under the 'better safe than sorry' policy...

Welcome aboard, keep us posted on things go!

Tom in Colo

[debee]

Not an answer to the question, but I am also on the deed but not on the loan of a property. It isn't and wasn't ever on my credit report either. I signed an affadavit consenting to the lien & that was it.

[lamdis]

statement of intention reply

On finan. Affairs 3(a) all payments 90 days prior included for all creditors unsec. and secured.
On Schd.A on description the obvious plus explanation of co-owner but not codebtor evething else selfexplanatory
On Schd.D here I labored but ended up naming creditors for secured claims on primary property which I co-own - wonder if need to place check on no secure creditors since not on my credit report-but anyway I guess the trustee needs to know.
On Sched H- Check no codebtors; is this right?
On Sched J- Just all expenditures available that can be sustained
On means test "the presumption does not exist" due to below mean

Many thanks great site for better perspective!

[btbeme]

The "it Isn't My House" argument won't fly if you live there, so...

If the home has equity according to the Trustee, you will be on the hook for 50% of that equity, minus any exemptions that might apply and/or any homestead that had been filed prior to your Ch 7 filing. Of course, if forced to sell, the Trustee would also have to consider the cost of selling, so that amount (6-8% of the sale price) would also be calculated into the mix. But, you will have the first right to make a cash offer if it goes toward a sale.

So, the real question is one of value...can you back up your claim of no equity with a few solid (not cherry-picked) valuations from Zillow.com and websites like that? Have you considered paying for an MA, a CMA, or an appraisal (a good Realtor can help with the first two)? A recent tax assessment? If the Trustee has a feeling that there is equity, I can almost guarantee that they will get an appraisal done, so heading this off at the pass might be a wise choice. An MA or CMA done by a reputable Realtor carries some weight, especially of it lines up with what Zillow or other websites say the place is worth. And an MA or CMA should cost less than an appraisal.

Put that value down on your filing, along with a brief explanation of the ownership situation. No need to explain how you came up with the value - just bring that paperwork in to your 341 hearing. If the Trustee has a question on the value, you will have your answer right there. You don't need to do the Trustee's homework for them ahead of time, but you do have to answer the Trustee when he requests info (probably at the 341 or before it, possibly afterwards). Plan to have a copy of the Deed as well - I promise that will be requested at some point.

[SunshineGal]

And all that being said, had a lawyer say it would be very rare for a mortgage lender to not have everyone on the deed also as a guarantor on the loan. Had clients 'not on the loan' suddenly get on the hook after the person 'on the loan' defaulted. Said it might be a clause buried deep in the contract.

Actually, this tends to be true with car loans, but not so with mortgages. Say John Smith and Jane Doe buy a home together, Jane can't qualify for the mortgage for whatever reason, but John does. The note is signed in the name of John Smith, and Jane, if she is going to be on title, has to sign the mortgage. That does not make Jane responsible for the debt, it simply means that Jane has granted a security interest in the *property* to the lender. Now, should the home go into foreclosure, Jane would have an option to pay off the remaining lien to keep the house, but if she chose to walk, she's still not responsible for the mortgage. I should add that anyone on the deed IS responsible for property taxes and homeowners association fees.

Back to the OPs question, the lien remains, so your interest in the property is equal to value minus lien divided by half, depending on state laws and how your house is titled.

Edited to add that the above may be different in a community property state where the house was acquired during marriage as I have no experience with that situation.

[tobee43]

The "it Isn't My House" argument won't fly if you live there, so...

If the home has equity according to the Trustee, you will be on the hook for 50% of that equity, minus any exemptions that might apply and/or any homestead that had been filed prior to your Ch 7 filing. Of course, if forced to sell, the Trustee would also have to consider the cost of selling, so that amount (6-8% of the sale price) would also be calculated into the mix. But, you will have the first right to make a cash offer if it goes toward a sale.

So, the real question is one of value...can you back up your claim of no equity with a few solid (not cherry-picked) valuations from Zillow.com and websites like that? Have you considered paying for an MA, a CMA, or an appraisal (a good Realtor can help with the first two)? A recent tax assessment? If the Trustee has a feeling that there is equity, I can almost guarantee that they will get an appraisal done, so heading this off at the pass might be a wise choice. An MA or CMA done by a reputable Realtor carries some weight, especially of it lines up with what Zillow or other websites say the place is worth. And an MA or CMA should cost less than an appraisal.

Put that value down on your filing, along with a brief explanation of the ownership situation. No need to explain how you came up with the value - just bring that paperwork in to your 341 hearing. If the Trustee has a question on the value, you will have your answer right there. You don't need to do the Trustee's homework for them ahead of time, but you do have to answer the Trustee when he requests info (probably at the 341 or before it, possibly afterwards). Plan to have a copy of the Deed as well - I promise that will be requested at some point.

absolutely correct! and that is exactly what we had to do.....actually we had to bring a "back" deed of over 15 years prior to show our names were only involved with 1/4 of that property.....the co owner purchased out our share at a negative equity, but to protect their interest...(we had a small mortgage on the property)...the co owner brought it out prior to our filing as their atty said now or at the 341....better to get it out of the way before.

the trustee STILL wanted to see the deed and how it read.....and IF the co owner had NOT paid off the mortgage ...(at a 20k loss by the way as the property had negative equity)....it didn't matter...the trustee saw proof we only from the on set owned 1/4 and now the co owner didn't have to bother to buy back our 1/4 from the trustee since it was done prior. trustee actually "liked" that...she said less work for her and done perfectly legally.

change it around a bit and even IF we owned 1/4 percent and proved it...and the co owner didn't buy that share up....and lets say just for discussion purposes the property DID have equity the trustee could have MOST certainly taken the property and sold it....now truth is, the trustee would have to have given the first 3/4 of the sale to the co owner....then taken our 1/4 share and divide it up amongst the creditors....it would have been an endless amount of paperwork and for such a small amount really in the scheme of things. but looking back our full intention was to only protect the other person which we did.

[lamdis]

statement of intention

Wow! the paper trail twists and turns in crooked ways.
So, will the trustee, if adequate equity magically appears, force the sale of primary residence or will he present lien to be placed on deed, and allow to keep property and continue payments as now. Is answer one or the other or whatever trustee decides on any particular day.

[tobee43]

Wow! the paper trail twists and turns in crooked ways.
So, will the trustee, if adequate equity magically appears, force the sale of primary residence or will he present lien to be placed on deed, and allow to keep property and continue payments as now. Is answer one or the other or whatever trustee decides on any particular day.

unfortunately, your correct, your at the mercy of the trustee....however, this needs to be discussed in detail with your atty PRIOR to you doing anything. also you must give the co owner an opportunity to seek legal advise on which is the best way to protect them in this situation.

however, once again IF the property has no equity it COULD be alright....the trustee may not force the sale....it was our understanding IF it went that far and our co owner had not purchased the mortgage and brought us out, then the trustee would have given them first right to buy out your share...what a mess.

again....find out for certain the worth of the property....it may be a big help to prove NO equity....that way your position could and would most likely be more favorable.

[tcreegan]

Hi lamdis,

So, will the trustee, if adequate equity magically appears, force the sale of primary residence or will he present lien to be placed on deed, and allow to keep property and continue payments as now. Is answer one or the other or whatever trustee decides on any particular day.

The trustee isn't going to fool around w/ liens, they want cash. If they can get a good chunk of cash by selling the property, they will force the sale. If no cash, no sale, they 'abandon' the property. Remember they have to get more $ than the mortgage + your homestead exemption amount, and in your case pay off the co-owners interest as well. So unless you have a sizeable amount of equity, the trustee isn't going to bother with you.

Good luck w/ your filing!

Tom in Colo

[tobee43]

Hi lamdis,

So, will the trustee, if adequate equity magically appears, force the sale of primary residence or will he present lien to be placed on deed, and allow to keep property and continue payments as now. Is answer one or the other or whatever trustee decides on any particular day.

The trustee isn't going to fool around w/ liens, they want cash. If they can get a good chunk of cash by selling the property, they will force the sale. If no cash, no sale, they 'abandon' the property. Remember they have to get more $ than the mortgage + your homestead exemption amount, and in your case pay off the co-owners interest as well. So unless you have a sizeable amount of equity, the trustee isn't going to bother with you.

Good luck w/ your filing!

Tom in Colo

tom's point about the "cash" is the real "bottom" line here and if the property can't sell or is worth nothing i still think you may be just fine!!!

[SunshineGal]

Wow! the paper trail twists and turns in crooked ways.
So, will the trustee, if adequate equity magically appears, force the sale of primary residence or will he present lien to be placed on deed, and allow to keep property and continue payments as now. Is answer one or the other or whatever trustee decides on any particular day.

I just did a quick Google search, but it looks like you can exempt a homestead exemption of $5,000.