Beating the Michigan vs Federal exemptions dead horse one more time. Need opinion.

[shoopy]

I have covered a bunch of this in previous posts, and am hoping to consolidate this into a couple of final questions on this topic. And, yes, I know that I am over thinking it.

As I have mentioned before, I am filing chapter 7, solo. Michigan allows use of either Michigan exemptions or federal exemptions. Michigan exemptions are total crap, with the sole benefit to me, of allowing the homestead to be totally exempted by tenancy by the entirety since my wife is not filing. There are NO other exemptions which apply to me.

Using the federal exemptions, after doing the exemption gyrations on the recently appraised home equity, minus 7% for sale, half to wife, $21,625 exemption for myself there is still $4,700 for the trustee to do with as he wishes. One assumption being made here is sale for full appraised value, but NONE of the attorneys that I spoke to could guarantee that the trustee would not use that number or higher as the value of the home.

What most of the attorneys have said, is that the trustee would likely offer to let me buy the $4,700 excess back from the court over a period of months, which wouldn't be ideal, but manageable. My problem is, that I am not a very trusting person. Couldn't the trustee just as easily say, 'heck if it's appraised at that much, let's put it on the market and see how much we can get?'

Given that I don't have any jewelry, or other valuable items that I am not willing to part with, and could go to Goodwill or similar thrift shop and replace every appliance and stick of furniture in my house, for half of the theoretical $4,700 that the federal homestead exemption would leave, is there any reason not to good with the crappy Michigan exemptions and keep any decisions about the homestead out of the trustees hands?

Oh, and I would gladly toss him the keys to my beater car in the process, too.

Does anyone find fault with my paranoid logic? Thoughts? Warnings?

Thanks for any input, and for putting up with me.

[LadyInTheRed]

It sounds like if you use federal exemptions, you want a guaranty on what the trustee will do about the non-exempt portion of your home. No attorney can give you a guaranty. But, they can tell you from their experience working with the trustees in your district what is likely to happen. If it were me, I think I'd find an attorney who I trust and who has a lot of experience in the district, express my concerns and priorities (like I don't want the trustee to sell my house, but don't care if he takes my jewelry and appliances), and follow the attorney's advice. But, it really is a personal decision how to deal with the fact that no attorney can guaranty what will happen. It sounds like you may prefer to make a decision based on the worse that can happen under each set of exemptions.

If you are uncomfortable taking any risk with your home, but are okay risking your non-exempt assets under MI exemptions, I say use the MI exemptions.

[shoopy]

It sounds like if you use federal exemptions, you want a guaranty on what the trustee will do about the non-exempt portion of your home. No attorney can give you a guaranty. But, they can tell you from their experience working with the trustees in your district what is likely to happen. If it were me, I think I'd find an attorney who I trust and who has a lot of experience in the district...

Yeah, i guess that is the bottom line.

As far as attorneys go, I have interviewed, in person, 7 of them and spoken on the phone to several other. Most seem to believe that the trustee will go with the tax value of the house (which is much less than appraisal), some think he/she will go with the appraisal, some think he/she will get their own appraisal. Some think the trustee will think that the excess amt will be so small that he won't even bother with it some think he might play hard ball and ask for payments to be made for the excess, none, of course, will guarantee that he won't sell it. To a man, each attorney has suggested going with the federal exemptions, reason being that the exemptions are much better, and most folks equity situations, are such that they would either be benefited by federal exemptions or it would make no impact. For a while, I was starting to wonder if they were getting a bonus for each federal filed.

Believe it or not, I still have not found an attorney that has filed with Michigan exemptions. I get that it's only a matter of checking the correct box on a form, but I'd still like to have someone who's checked that box a couple of times before.

Hmmm, I don't imagine that you can switch from federal to state exemptions if you are not happy with the outcome of federal...