How much equity is too much if we want to keep house?

[georgia12345]

Advice would be beyond appreciated! I am posting on the situation that my father is in. He is embarassed and has not brought it up that he was in such a hole until things have gotten worse. He is getting letters from credit cards saying they are going to sue him and they are trying to send him a summons. He owes nearly $100,000 just to credit cards. Up to date on mortgage.

We are still trying to learn more, but we think Ch 7 is the answer.
The problem is... going on what the county appraises... he has 80,000 in equity. How much does that equity have to drop for the trustee not to want to sell our house?
My father would get $15,000 and a realtor would get $20,000... so lets say the appraisal drops $40,000 (we need a new roof, other issues not factored in)... so the trustee can only make $5000 if there is $40,000 in equity.
Do they sell? What is a safe number for them not to sell the house?

My dad is struggling enough as it is, I'm going to help him with mortgage payments and and he gets social security soon. His business is hurt by the economy and he is mostly in debt helping me get through college. I owe it to him. It's my future as well. I hope to keep learning and maybe one day I can help others on here.

Please help with advice!

Thanks.

[scorpion35]

Advice would be beyond appreciated! I am posting on the situation that my father is in. He is embarassed and has not brought it up that he was in such a hole until things have gotten worse. He is getting letters from credit cards saying they are going to sue him and they are trying to send him a summons. He owes nearly $100,000 just to credit cards. Up to date on mortgage.

We are still trying to learn more, but we think Ch 7 is the answer.
The problem is... going on what the county appraises... he has 80,000 in equity. How much does that equity have to drop for the trustee not to want to sell our house?
My father would get $15,000 and a realtor would get $20,000... so lets say the appraisal drops $40,000 (we need a new roof, other issues not factored in)... so the trustee can only make $5000 if there is $40,000 in equity.
Do they sell? What is a safe number for them not to sell the house?

My dad is struggling enough as it is, I'm going to help him with mortgage payments and and he gets social security soon. His business is hurt by the economy and he is mostly in debt helping me get through college. I owe it to him. It's my future as well. I hope to keep learning and maybe one day I can help others on here.

Please help with advice!

Thanks.

what do u mean your father gets $15000 and realtor gets $20000?

[Chowder]

Advice would be beyond appreciated! I am posting on the situation that my father is in. He is embarassed and has not brought it up that he was in such a hole until things have gotten worse. He is getting letters from credit cards saying they are going to sue him and they are trying to send him a summons. He owes nearly $100,000 just to credit cards. Up to date on mortgage.

We are still trying to learn more, but we think Ch 7 is the answer.
The problem is... going on what the county appraises... he has 80,000 in equity. How much does that equity have to drop for the trustee not to want to sell our house?
My father would get $15,000 and a realtor would get $20,000... so lets say the appraisal drops $40,000 (we need a new roof, other issues not factored in)... so the trustee can only make $5000 if there is $40,000 in equity.
Do they sell? What is a safe number for them not to sell the house?

My dad is struggling enough as it is, I'm going to help him with mortgage payments and and he gets social security soon. His business is hurt by the economy and he is mostly in debt helping me get through college. I owe it to him. It's my future as well. I hope to keep learning and maybe one day I can help others on here.

Please help with advice!

Thanks.

Look up the state he lives in for Homestead Exemption amount.
But a BK may not be necessary. Is he employed? Have significant cash or savings?
If not he may only need to be worried about a lien on the house if the card companies sue and get a judgment.

[georgia12345]

$15,000 for homestead exemption, $20,000 for realtor costs... that's the number we were given... I guess there is no way to know exactly how much realtors get. So basically just using the homestead 15k and then realtor cost... what number would the houses need to be appraised at if we owe 160k and the house is worth from 190-240k

[keepmine]

house is worth from 190-240k

You need to tighten that number up. A $50K spread is impossible for anyone to give any advice.
Ask a realtor to give an appraisial as to how much the home would sell for in say 60 to 90 days. That's how a trustee would sell it. They won't hold out for top dollar. As a general rule, most trustees allow a 7 to 10% cushion for closing costs.
So, the apprsail comes in at $190K you likely are safe from a sale. It comes in at $240K and the trustee will likely sell it.
Most bk lawyers give free or lowcost intial consultations. SPeak witha few and see what they suggest. But, I'm betting the first question they ask will be what I asked. What is the home realistically worth? HAve that documented when you go to the lawyer.

[georgia12345]

Thanks. Well I gave a large range to determine what we need our house to be appraised at to keep it. Zillow appraises it at $240,000... it also appraised another in the neighborhood for $245,000 and that one is for sale for $190k and it has yet to sale... I think this is a very important comp to help us.

So it appraises at $210k... so $50k in equity... $15k homestead and $20k realtor fees. Does the trustee try to move forward with $15k to split between him and creditors?
We need a new roof, we have a foundation issue, among other things we can point out to an appraiser... so the actual price depends on a lot of things. The price has trended downwards quite a bit in the last few months as well...

Knowledge is appreciated!
Thanks.

[debee]

Zillow is awful. We had to value three properties and Zillow was high on all of them. Bank of America has an online valuation tool that was very close in all three cases, but only if we looked at the low end value. This is my attempt at linking to it: http://realestatecenter.bankofameric...value-_-102910

Your attorney should know if you need a CMA, or professional appraisal to keep the trustee's paws off.

[ValleYum]

debee: Zillow was horrid for us, too. It was 20k over what the top short sale agent in our city determined as a sale price on our CMA.

Getting the CMA was $50.00 WELL spent. I think the OP should get a CMA or an appraisal done particularly if there are expensive maintenance issues (foundation and roof) involved.

Also, 20k in Realtor fees on a 210k house seems high to me. 6-7% seems to be the standard and usually is negotiable.

To the OP: I hope you can get things worked out for your daddy. I admire your desire to help him in return for his earlier financial support. Do you live in the house with your daddy?

[georgia12345]

So we have about 30k of equity before the trustee can make any money... so if out house is appraised for $190 he probably won't force sell. If it brings more like 200k- 210k... does the trustee sell when there is only about 10k to be made? Especially in this economy when there is one sitting there on the market for 190k... does he even try to sell?
Thank you for the help, more advice is appreciated. I am going to live with my father to help him pay his mortgage. I figure selling in the future for a 50k profit sure beats losing the house...

[tcreegan]

Hi Georgia12345,

Your dilemma seems to hinge on the appraisal, so it might be a good idea to find out who the trustee uses. The other key piece of information is how much $$ is enough for the the trustee to force the sale. Here is where a good local BK attorney earns their fee...someone who has experience w/ the BK court and the trustees.

Since a lot is at stake here, the old saying "an ounce of prevention is worth a pound of cure" might apply....

Tom in Colo

[keepsmiling]

I am in EXACTLY the same boat.

How would we find out which appraiser is used?

We owe 214 on two mtgs. We got a CMA for 235-250 and if trustee goes for it, we are safe; but since this is low according to Zillow and if they decide it's worth more we could be in trouble.

Good luck and please keep us posted!