Will I still lose my house?

[sbkrzy81]

I am probably going to have to file bankruptcy due to a reposession with garnishment. I have roughly 20,000 in equity and owe around the same amount to debtors. In Virginia the exemption is only 5,000. I am currently the only person on my mortgage. My dad offered to cosign for me to refinance. With his name attached to the mortgage can the trustee still sale. If so I guess my best option is to refinance plus 20,000 and just pay the debtors off. Any other ideas would be appreciated.

[tobee43]

welcome to the forum sbkrzy81!

it's really hard to say how the trustee who handle the situation being that you are over by 15k with your allotted exemptions. i would go for a few free atty consults to get their take on the situation. some trustees will or would want to sell the house. however, as you have pointed out maybe there is some way to refin since you have equity and get ride of those creditors...and although, due to your current credit standing that may prove to be difficult.

again, the first i would do is a few free consults to get a bk atty's take on the situation. it seems like it's not that much money you owe to have to lose your house over. best of luck and keep posting there are many out there to help. hopefully someone else will also chime in with a different view.

[sbkrzy81]

what about the cosigner?

welcome to the forum sbkrzy81!

it's really hard to say how the trustee who handle the situation being that you are over by 15k with your allotted exemptions. i would go for a few free atty consults to get their take on the situation. some trustees will or would want to sell the house. however, as you have pointed out maybe there is some way to refin since you have equity and get ride of those creditors...and although, due to your current credit standing that may prove to be difficult.

again, the first i would do is a few free consults to get a bk atty's take on the situation. it seems like it's not that much money you owe to have to lose your house over. best of luck and keep posting there are many out there to help. hopefully someone else will also chime in with a different view.

Thanks for the reply. As I said before I have a willing cosigner with flawless credit. If I went that route just for the amount I currently owe could the trustee still take it? Even with a cosigner that won't be on the bankruptcy petition?

[tobee43]

it's hard to say really what a trustee will or will not do. each state, county and district handle things differently, actually, some districts having many trustees, one may handle it one way, while the other may handle it completely different, so, i can't answer that question as there truly is no way to know for certain what the outcome would be. and, remember, it's still going to be your exemptions whether there is a co-signer or not.

what about just co-signing for the refin and just paying off the creditors?

[LadyInTheRed]

Having a co-signor on the mortgage would not change what the trustee is likely to do. Having somebody else on title might, but you can't transfer title to your father before filing BK. If your father co-signs and you later file a Chap 7, you will not have personal liability for the mortgage, but your father will. A cash-out refi will decrease the equity in your home, in which case you might leave nothing for the trustee to take. But, it wouldn't make sense to use equity in your home to pay unsecured creditors and then file BK.

If you have sufficient disposible income to pay off your unsecured debt over 36 to 60 months, a Chap 13 may be a good option for you.

The refi instead of BK may be a good option too, if your father is willing to take the risk of cosiging. But, before you have him take that risk, take a good look at your budget and make sure you are able to pay your mortgage and other living expenses without using credit. If not, maybe you can't really afford the house. You don't want to be in a position later where you find yourself in debt again and decide you have to file BK, but are concerned about putting your father on the hook for a mortgage deficiency.

ETA: Another option would be to just let the garnishment continue until the debt is paid off. How much of the $20k in debt is owed to the creditor with the judgement? Will you be able to keep the rest of the debt payments current so the other creditors don't sue?

[frogger]

My dad offered to cosign for me to refinance. .

I don't mean to be blunt here, but don't get your dad involved in your financial problems.

[jst4f]

Can't really tell from your post your whole situation or what is driving you to consider aBK. In general, the more complex the BK, the harder and more expensive the BK. Complexity causes your attorney to do more work ($) and the TTs seem to look closer at your filing. Adding your Father as co-signer adds complexity without any real benefit. Keep it simple.

[helpmeout]

Do you have the option of using Federal Exemptions in Virginia? If so, you should be able to exempt the equity in your house.

All refinancing the mortgage with your dad's name on it is going to do is enable the bank to go after him should you not pay. And adding him to the Deed could be viewed as transfer of assets and is extremely likely to be challenged by the Trustee.

[ValleYum]

Do you have the option of using Federal Exemptions in Virginia? If so, you should be able to exempt the equity in your house.

All refinancing the mortgage with your dad's name on it is going to do is enable the bank to go after him should you not pay. And adding him to the Deed could be viewed as transfer of assets and is extremely likely to be challenged by the Trustee.

Sadly for the OP, Federal BK exemptions are not available in Virginia.

I agree about NOT adding anyone to any deed, title. etc. immediately prior to filing BK - bad idea. Bad.