home exemption question

[ricks48]

Hi I am a newbie, just joined. We live in Maine, thinking of filing Cp 7, I am confused about being able to keep house. I read the home exeption in ME is 90,000 (I am over 60) and may be more with spouse. The balance of our morgtage is 97K +,- and the market value is 200,000 +,- we also have a home equity loan for 35,000. Can we stay in the house? Could we sell it after filing Cp 7. Tks for any help.

[BKDefender]

If you owe $97k on your first mortgage and $35k on your second (total $132k) and your home is valued at $200k, then you'd have $68k in home equity. If your exemption in your state is $90k then you should be fine. This is assuming that your home equity loan is a secured loan with a lien against your home (which 99.9% of the time it is.)

I just took a look at my Best Case exemption table for Maine and it shows that under Maine Revised Statutes Annotated, title 14, section 4422(1)(B) you have a $95k exemption for homestead (or burial plot) if over 60 years old or disabled. Your other exemptions are $5k/debtor for a motor vehicle, $750/debtor for jewelry, $5k/debtor for tools of the trade, $400/debtor wildcard (usually used for cash) and other exemptions that have no limits. If you PM me with your email address, I'll send you a PDF of the exemption table.

--William

[ricks48]

Thank you for reply, yes 2nd mortgage is secured loan, so we should be fine means they will not sell from under us?

[BKDefender]

'you should be fine' means that if those numbers are accurate, then you should have no problem exempting all of the equity in your home and they wouldn't be able to take your home based solely on the value of the equity in your home. Now if you only had a $97k first mortgage and no 2nd, then you'd have about $103k in equity and the trustee would want you to pay in a portion of the non-exempt equity ($103k-$95k=$8k in non-exempt equity) to distribute to creditors or force a sale of the home.

With a secured creditor, they generally will reaffirm the debt as long as you've been paying and you'll continue to pay. If you're months late on your mortgage a Chapter7 only delays them for a month or so until they foreclose.

--William

[ricks48]

Ah as it unravels... OK I am current on the second loan, but about 2 months behind on
1st. Also my wife and I are both unemployed, the reson we are looking into Ch 7.

[BKDefender]

If you're behind on your payments, Chapter 7 will only extend the time you can stay in your home. Strategically, if you want to stay in the longest, file your Chapter 7 BK case a few days to a week prior to the scheduled trustee sale. It'll take 30-45 days to have your 341 meeting then they'll file a motion for relief from stay, have a hearing in a week or two (or more depending on your judge's MFRS calendar), get an order releasing the stay, and they'll re-schedule your trustee sale.

In Nevada it takes two weeks for the MFRS and 26 days from the first date of re-notice of the sale, and that's only if they're really on the ball.

I just got back from court this afternoon where a client's stay was lifted since he's unemployed and can't pay his mortgage. The attorney for the lender said it's taking them 6-8 weeks to get things sold, so my client, who has surgery in two weeks, will be able to recover just enough before having to pack everything to move. Sucks I know, but he's been in the house since August '09 without paying the mortgage so he'll have enough money for a deposit on a rental home soon. We'll see.

--William


--William