Hi. May I please ask for some advice regarding home equity?

[UGACardman]

Hi everyone. It's nice to have found this forum. Please bear with me as I am trying to assimilate all the information from the posts.

My first question is regarding a Chapter 7, and home equity. If I have $90,000 in equity, owing $30,000 more on the mortgage, and owe $70,000 in credit cards, what will happen to my house? I want to keep it. If I file Chapter 7 and then am approved, can I sell my house later or quit claim it to my son after my bankruptcy is discharged? Will the trustee want to take my equity and force me to leave? Will I be forced into Chapter 13?

Thanks everyone for your patience.

I would like to file for a Chapter 7. It looks like I passed the online means test at nolo.

I'm all new to this, in fact, today is my first day of finding this forum.

So, I guess that I'll introduce myself in the other section.

Regarding chapter 7, this is what my figures look like:

$1,000 a month retirement from Georgia Power
$1,000 a month social security
$960 a month from part time job at Wal Mart

$1200 a month to debt consolidation company (owe $70,000 to credit cards)
$250 a month to IRS (owe $20,000)
$120 a month to GA Dept of Rev (owe $10,000)

$350 a month to mortgage company (owe $30,000 more)

Equity in house ($90,000)

Vehicle-worth $900-$1200

Thanks again.

[UGACardman]

Oops, can I ask here in this post about the IRS and GA Department of Revenue? Or would you all like me to start another post? I'm just wondering about the $20,000 owed to the IRS and the $10,000 to the State...will it be discharged in a Chapter 7. Ok, thanks everyone.

[free2breathe]

The Georgia homestead exemption looks like it is only $10,000 ($20,000 if you have a spouse), so at least $70k in equity would not be protected.

Tax liability that was incurred or assessed in the last three years cannot be discharged. Best suggestion here is to set up a few free consultations with bankruptcy attorneys in your area to get a feel for what is available to you as far as bankruptcy protection.

[drowning123]

No, taxes will not be discharged. If you're current on your mortgage, you can do what we call "pay and stay" without signing a re-affirmation agreement.

[tcreegan]

Hi UGACardman,

Will the trustee want to take my equity and force me to leave? ...short answer = Yes

With 90K in equity, the trustee is going to sell the house and distribute the proceeds to your creditors. Unfortunately, in a BK in Georgia, you only get to keep 10K of the equity (20K for a joint filing) in your home. One of the worst states for this....maybe THE worst...

So your situation would be, declare BK, the trustee sells the house, pays you 10K, rest goes to your creditors. Since tax debts have priority over cc debt, the only silver lining would be the taxes getting paid off.

Will I be forced into Chapter 13? ....possibly, but I think this is where you want to be anyhow. You can get your debt load back to manageable while protecting the equity in your home.

Some taxes can be discharged....federal income tax over 3 yrs old (if you filed, IRS assessed, some rules) in either a Ch 7 or Ch 13. A Ch 7 is just yes or no, but the Judge in a Ch 13 has a lot of leeway to determine what gets paid to whom in the Ch 13 plan and if what paid is all whom is going to get....(Who is on first?)

Bottom line here is to take all your info and post it in the Ch 13 forum and see what folks over there have to say; do you qualify, can you save the home equity, can you discharge the taxes

Hope it works for you, hate to see you lose your home trying to get back on your feet...

Tom in Colo

[UGACardman]

Hey free2breathe. Thank you for being the first to post and thanks for the information about the Georgia Homestead exemptions.

Hi Tom in Colo. Thanks very much for your thoughts and advice. I'll post in the Chapter 13 forum.

Hello drowning123. I appreciate your post about taxes.