Worried about home equity. Help me stay on track.

[shoopy]

You're way overthinking this.
If the property is really held T by E exemption amounts are of no consequence. The non filing spouse can't have there ownership sold unless they give their permission. I have no idea what happened with the 6th circuit ruling but, T by E is a well settled concept in law and is a type of ownership allowed in close to half the states. I really think you're manufacturing things to worry about. Do some basic reseach on exactly what T by E means.

I agree with you 100% that I am probably over thinking this.

I understand what T by E means, but T by E is a state concept, not Federal. Approx. 20 states allow T by E, which offers protection from creditors, including my state, Michigan. What twists me up is that my understanding is, that we can choose either state BK rules or federal BK rules, with no picking and choosing between the two. So, in my mind, if I file with the state rules, I get T by E (as well as all the deficits implicit in the 6th Circuit opinion).

When I look at the federal rules, I see nothing about T by E, and since it's a federal court, using federal rules, I worry. Do federal rules automatically include state T by E rights?

Incidentally, 6th Circuit did not affect T by E, just the larger bankruptcy specific homestead exemptions.

[keepsmiling]

What the heck is with Michigan? Bizarre rules about extra 13 payments and now this.....
Regardless, you need to have some idea what your house is really worth. Whether or not the realtor may be annoyed is of little consequence.

[shoopy]

What the heck is with Michigan? Bizarre rules about extra 13 payments and now this.....
Regardless, you need to have some idea what your house is really worth. Whether or not the realtor may be annoyed is of little consequence.

It's not so much Michigan, but the United States Court of Appeals for the Sixth Circuit. There is a great consensus that their opinion will be over turned due to established case law, by the supreme court. But who knows how long it will take to get to the supremes. Meh.

Yeah, I will probably look into getting a realtor estimate.

[TheBajan]

I agree with you 100% that I am probably over thinking this.

I understand what T by E means, but T by E is a state concept, not Federal. Approx. 20 states allow T by E, which offers protection from creditors, including my state, Michigan. What twists me up is that my understanding is, that we can choose either state BK rules or federal BK rules, with no picking and choosing between the two. So, in my mind, if I file with the state rules, I get T by E (as well as all the deficits implicit in the 6th Circuit opinion).

When I look at the federal rules, I see nothing about T by E, and since it's a federal court, using federal rules, I worry. Do federal rules automatically include state T by E rights?

Incidentally, 6th Circuit did not affect T by E, just the larger bankruptcy specific homestead exemptions.

Shoopy,

It is one or the other. Federal rules do not include state T by E. There are drawbacks to the state rules in other areas. Cars, for example, have no exemption amount under Michigan T by E rules and the exemption for household belongings is limited to just $1000. Under federal there are higher exemptions for both. You have to look at the overall package of how it affects or benefits your particular case. Based only on the information you've given us so far, if I were in your shoes I would probably have gone with a seven under Federal rather than a 13 under state.... but, I don't know all the in's and out's of your situation. In our case, doing a 13 meant stripping a second mortgage and keeping the rental property exempt from creditors. We have a paid for car (in my name only) that was valued at $8900 when we filed so we have to repay it's value back into the plan. Under federal, we would have saved $3500 through the auto exemption. Everything else was exempt so that was the only drawback for us. We had a few other smaller assets that I thought we would loose but our lawyer managed to exempt them also.

Regarding a Realtor, most won't be interested in helping you if they know you are not planning to actually list the house. In our case, we went to the number one Realtor in our area. She's helped us buy and sell in the past and as embarrassing as it was, we were totally honest with her. She was very willing to help b/c she knows that when it's time, we will come to her again in the future. Our atty told us to get a CMA based on a desperate sale if we "had to sell it today" scenario. She came back way below the SEV so don't take the tax records as market value. The court will look at market value. SEV's are way out of wack right now.