How is your homes value determined by courts?

[Frodo]

In trying to determine whether or not you have any equity in your home, what value is used by the courts to determine your home value value? I am thinking there is quite a bit of wiggle room here.

The home could be sold for VALUE + X if it were listed for 6 months as opposed to selling for VALUE - X within 2 months.

Just curious how the valuation is done. Thanks.

[HHM]

The technical standard is "fair market value". But your right, there is quite a bit of wiggle room. Also, it is you that first takes a shot at assigning the value. The trustee will only take a second look at it if they think your number is way off.

[BK'd-Betty]

We were required to have a written appraisal at our 341, which we had to pay a couple hundred bucks for (I thought that was kind of burdensome to require of someone who is insolvent)

[toomuch]

We were required to have a written appraisal at our 341, which we had to pay a couple hundred bucks for (I thought that was kind of burdensome to require of someone who is insolvent)

I totally agree Betty. Btw, I love the "I heart my cat...my cat doesn't care"

Toomuch

[tay666]

Anyone have any other input for this?
I am very curious as we need to know our equity before we can decide how to move ahead.
Ohio doesn't give a lot of exemption for equity so it's kind of important.

The local tax office lists our house and land as valued at $45,000

In 1998 for our refinance, it was appraised at $46,500.

I don't know what to figure it at now.
It should have appreciated since thing, but the housing market here is pretty bad.
Also since that time, a lot of things have started to go bad.
There are many repairs that need to be done. Like a new roof, new gutters, as well as a bunch of smaller things.
Last fall we found out we also have termites! Which I discoverd aren't all that uncommon up in this area.
I checked some online sources but they all give a huge range for the value.
One of the narrowest I found was $28,000 and $87,000. That doesn't help at all.

We only owe $20,000 on it now.
Was thinking of trying to get a home equity loan to get some repairs done. As that would both fix the house and chew up equity to get us into a chapter 7.
But I have no idea how big a loan to try and get.
Should I consider getting an appraisal done?

[HHM]

The appraisal you have is out of date.

Again, as for the standard the court will use, it will be market value which is determined by comparable sales, i.e. what comparable homes sold for in your area. As for how to figure this out, you only have 2 choices, (1) contact a realtor and ask them for COMPS, (2), pay for an appraisal.

If you only owe $20K, and the home appraised for $46,500 in 1998, I suspect you have quite a bit of equity. Taking out equity for repairs is good, but taking out equity to try to get into a chapter 7 is not so good. After all, you are facing bankruptcy, the last thing you need is more debt.

[tay666]

Just looking at options.
As it is pretty apparent we are going to file BK.
Due to my having to take a lower paying job after my factory moved overseas. And my wife having to work less hours and at a lower pay due to medical issues.

We don't want to loose the house, but I don't see how we can do a chapter 13 either.
As things currently stand we could only do maybe $100 a month to a plan. That wouldn't even be 5% payback.
Don't know if they would allow such a small amount.

[lrprn]

We don't want to loose the house, but I don't see how we can do a chapter 13 either. As things currently stand we could only do maybe $100 a month to a plan. That wouldn't even be 5% payback.
Don't know if they would allow such a small amount.

Tay, have you met with any bankruptcy lawyers yet? Most give free initial consultations and could help you sort this out.

There have been Ch 13 plans confirmed that pay back 0% to non-secured creditors. To find out if this is a possibility in your situation, make appointments for free consulations with 3-4 bankruptcy-speciaty lawyers in your area. You will find out a great deal about what options you have in your unique circumstances, plus hopefully find a lawyer you feel comfortable with to help you file. Keep us posted on what you find out, ok?

[niteflytes]

The county tax assessment value was accepted for my house but I don't know if that is always the case or if it is because I've owned the house less than 2 years and had zero down payment so they already knew I had no equity in it.

[tay666]

Tay, have you met with any bankruptcy lawyers yet? Most give free initial consultations and could help you sort this out.

There have been Ch 13 plans confirmed that pay back 0% to non-secured creditors.

Ok.
Good to know.
We have done one consultation so far. Knew nothing when we went in.
It was actually his idea that we get a loan to eat up equity.
The more I read and ask questions. The more I get the idea that he just likes to do straight chapter 7 cases at a flat fee.
He wouldn't really discuss a chapter 13 with us. Pretty much brushed it off and said we don't even want to think about going that route.

I have started looking for more lawyers to talk to.
The biggest problem is we are fairly rural around here, and most seem to be at least 100 miles away. (not many lawyers at all in the small cities around here. Most of the BK lawyers listed in the local yellow pages seem to be from Cleveland, Columbus, Akron areas.)
I'm not doing anything until I talk to 2 or 3 more.
I'm just trying to see what options are out there. And arm myself with as much info as possible so when I do more consults, I can ask the questions I need to ask.

[NowOrNever]

In our case, we put down what we thought would be the fair market value based on an appraisal we'd had from a couple of years ago. The trustee questioned it and hired his own appraiser to come out (paid out of the estate money). In the end, they came up with a higher figure than we did, but not shockingly higher. We were able to pay out the equity difference to the trustee with the help of a relative. It made us an asset from a no-asset case, but everything else went smoothly.

We had a great attorney and trustee, so we were happy.