Had consult with attorney today. Please help!

[octoblonde]

I met with an attorney today for a consult about filing Ch.7. It wasn't the attorney who would be representing me. He was out of town, so another guy from his office met with me.

I live in NY state. I'm on SSDI. I plan on using Federal exemptions to use the unused portion of homestead exemption to protect my vehicle. He didn't seem 100% sure about some things. He says I need to get a market analysis on my house because it was last assessed at $125,800 2 years ago and I co-own the home with someone and we owe $97,800 on the mortgage.

The attorney is saying that the trustees here are cranky, irritable and nit picky. He is hoping I can have my house evaluated by a realtor to bring the equity down and thus, I'd have more homestead exemption left to cover the vehicle. I'm not even sure how much the vehicle is worth, but I own it outright. It needs some work, and I valued it in "rough" shape per Edmunds.com. It's been in an accident, needs transmission work, the power driver's seat is broken, the moonroof is broken, and tailgate lock sticks, the leather in the driver's seat is ripped, the paint is scratched in several places and the hood has dents in it. It's an almost 8 year old vehicle with 68,000 miles on it. It's a Chevy Avalanche, 2004.

My questions: If I co-own the house, is my equity only half, or can the trustee go after the other party's share? Using Federal exemptions, will I have enough to cover the jointly owned house and my vehicle? Is the Edmunds.com value for my truck going to fly or do I need to use KBB? I don't think we have Carmax around here. The lawyer seemed to think Edmunds would be ok.

This attorney mentioned a possible Chapter 13 to protect the vehicle and I shut him down on that. I'm on SSDI and owe almost 60k in credit cards and medical. A Chapter 13 wouldn't make any sense to me.

He seemed knowledgeable, but unsure on some things, regarding the house and vehicle. He thought it "looked" like I could probably file Ch. 7. He said we couldn't proceed without the market analysis done by a realtor.

I will get the analysis, and perhaps a consult with another attorney or two, but any help or suggestions from the forum would be greatly appreciated.

Thank you!
Jennifer

[Jacey]

It sounds like he wasn't very knowledgeable. Even if you use all your homestead exemption on your house, there are plenty of exemptions left for your vehicle. Look up the federal exemptions and go through it. I think you would be ok with what you've listed, even if you did have to claim all the house equity. Do you have a lot of assets other than the house and vehicle?

[AngelinaCat]

You need to consult some more attorneys. Its a bad sign when the person you actually went to see was not there, and you had a stand-in. This is NOT the start of a good attorney-client relationship.

[keepmine]

For sure see another few lawyers.
Also, it looks like NYS exempts up to $50K in equity for your home so you'd get half that amount as an exemption. You may wish to use state exemptions.

http://www.thebankruptcysite.org/exemptions/newyork.html

[octoblonde]

Thank you, Jacey, Angelina & Keepmine. The reason I wanted to use Federal exemptions is because of the wildcard (unused portion of homestead.) I was under the impression that NY does not allow that. I could be wrong. If NY allows this, then it would be no problem at all to file a Chapter 7 and not worry about how much equity is in the house. NY (in my county) allows $75,000 homestead and $4,000 vehicle. They recently increased their exemption allowances. I don't have anything valuable to protect besides my truck, except a lump sum SSDI back payment (exempt) and my Son's bank account, which has about $750 in it. Does anyone know if NY allows an unused portion of the homestead exemption to be used as a wildcard?

Thank You!

[justbroke]

My questions: If I co-own the house, is my equity only half, or can the trustee go after the other party's share? Using Federal exemptions, will I have enough to cover the jointly owned house and my vehicle?

For the equity, this entirely depends on how the property is titled!!! (Joint tenancy versus tenancy in common versus tenancy by the entireties.)

Is the Edmunds.com value for my truck going to fly or do I need to use KBB? I don't think we have Carmax around here. The lawyer seemed to think Edmunds would be ok.

This is District specific. It's only a question if the Trustee uses a different book. In my District, the Trustee(s) have let everyone know that they use Black Book. Many other Districts use the NADA guide, and some use Kelley Blue Book (KBB). It just depends. You can start with Edmunds.

This attorney mentioned a possible Chapter 13 to protect the vehicle and I shut him down on that. I'm on SSDI and owe almost 60k in credit cards and medical. A Chapter 13 wouldn't make any sense to me.

I don't know why anyone would file Chapter 13, to save a car!!!!!

[octoblonde]

JustBroke,

The house is titled joint tenants with right of survivorship. I have been looking for an answer as to how this will affect my homestead exemption. I'm hoping it will cut my equity in half, but maybe it won't. Is a trustee likely to go after the co-owner's half? Also, I think the only way I would reaffirm the mortgage is if I could get the other party's name off the mortgage & title. He wants his name off of everything, as well. I probably could not do this until after the BK is discharged, I'm assuming. If you could clarify any of this and let me know what some possible options are, I would greatly appreciated. I have a consultation set up with another attorney next week.

Thank you!

[octoblonde]

...and you're right, it would be ridiculous to file a Ch.13 to save a vehicle. I'd be better off buying the vehicle back from the trustee than paying into a Ch.13 for 5 years.

[justbroke]

The house is titled joint tenants with right of survivorship. I have been looking for an answer as to how this will affect my homestead exemption. I'm hoping it will cut my equity in half, but maybe it won't. Is a trustee likely to go after the co-owner's half?

Unfortunately, and depending on your State's underlying non-bankruptcy laws, "joint tenants with right of survivorship" won't stop the Trustee from seeking permission to sell the property to recover the equity for the Estate. The "joint" tenant(s) would get their share, but the debtor-tenant would have their share contributed to the bankruptcy estate. Of course this all depends on the fervor of the Trustee and how much equity there is to claw at.

As for reaffirming to remove the other name on the title, this won't prevent the Trustee from clawing at the equity anyhow. In any event, I don't know of any bank that would let you reaffirm and remove the name at the same time. You may have needed the co-debtor to obtain the mortgage. This could make it difficult to refinance.

[octoblonde]

Justbroke,

At most, there is only $28K total in equity. With the house having a co-owner in another state and Federal homestead exemption being around 20K, I doubt it would be worth going after. The county I live in in NY state now has a $75k homestead exemption. I was going to use Federal and hope to carry over the allowed $10K+ of unused homestead as a "wildcard" to protect my 7 year old vehicle, which I own outright. If I had to, I could sell the truck, spend the money and then use only the $4k that NY state allows in vehicle equity to use as a down payment on a newer vehicle. Then I could use NY exemptions to cover my house and not have to worry about anything. But then I'd have a car payment at a high rate.