Attorney insists on 13 -- BUT

[Introuble2008]

The attorney we've been talking to insists we have to go Chapter 13. Says the value of the house is more than what we owe.....Question -- doesn't the court take the appraised value (tax) or do they use a realtor's guesstimate?

Question 2 -- if we go 13, it'll mean we have enough to live on for now -- HOWEVER, when my DH goes on SS in 1 1/2 yrs, our income will go down....and we'll have $800 a month for groceries and gas. How would that be handled? Wouldn't that be a consideration now? Would the courts go in and re-evaluate?

BTW - we're going to talk to another attorney or 2 -- this guy bugs me. Answers me thru e-mail, and then only answers half of what we ask.

[cj0203]

I am pretty sure if your income drops enough to create a problem you can convert to a CH 7 but I am not sure what the guidelines are for that to happen.

I hope you can get some answers from a lawyer soon!

[jnjw]

I don't think they take the tax appraisal value on homes. At least, they didn't with ours. We had to have it appraised.

I've been reading on this board and another board that some attys will push for a 13 even if you're eligible for a 7 because they charge more to do a 13, so it's good that you're going to seek out the advice of other attys. Plus, if you don't like this particular one, I would suggest not using him/her. My husband didn't feel good about our atty, but I kind of liked him, in the beginning, and so that's who we went with. I'm thinking now, I should have listend to my husband...lol. It's rare for him not to like someone right off the bat, so that should've been a big red flag for me.

Good luck!

[325Falcon]

We used the tax assesment for ours. Who know though with todays market you could be better off with market value. What state are you in?

[Introuble2008]

We used the tax assesment for ours. Who know though with todays market you could be better off with market value. What state are you in?

We're in Oregon. We've had the house on the market for a year...2 sales both fell thru -- NOT because of the price of the house. Tax value is $93,000 -- real estate agent says $175,000. The county clerk said the $93,000 is the assessed value - and that the real (blank) value is $197,275. We haven't been able to sell it -- started at $190,000 and on down to $175,000.

[krielly]

Sounds like it is an equity issue which will force you into a 13. not sure what your exemptions are in Oregon, but if you can't exempt your equity in your home, and want to keep it, you have to go with a 13.

You didn't say what you owe on the house.....

Edit: I just looked up Oregon, looks like you can possibly exempt 25K.
We're lucky here in Vermont, we can exempt 75K

[Introuble2008]

Sounds like it is an equity issue which will force you into a 13. not sure what your exemptions are in Oregon, but if you can't exempt your equity in your home, and want to keep it, you have to go with a 13.

You didn't say what you owe on the house.....

Edit: I just looked up Oregon, looks like you can possibly exempt 25K.
We're lucky here in Vermont, we can exempt 75K

We owe $117,000

[krielly]

Sounds like you will definitely be in a 13 due to the equity you have (sounds pretty considerable, even if you go with the 175K estimate).
At any rate, if you are at ALL uncomfortable with the atty you talked to, by all means find another.
You definitely want a good attorney that is responsive to you and one who has a lot of experience in 13s.
Also, the better your attorney, the more wiggle room you will have in your plan, and the better off you will be over the next 5 years. A good attorney can "pad" your budget enough to make your plan less painful for you.

I wish I had known about this forum back when we filed in Oct 05. There are many things I would have done differently. Of course, we were pretty pressed for time, as we were trying to file before the new law went into effect. Wound up with an atty I SWEAR has ADHD, lol. But all in all, I guess it turned out ok.

Definitely get a couple more consults. Your attorney should also be able to tell you what source to use for your house value.

Let us know how things progress! Glad you found us at this stage. Like I said, I wish I had back when we filed.

K

[ameliabedilia]

If you don't want to keep the house and want to get rid of it, why don't you just surrender it?

[Introuble2008]

We want to keep the house -- we're in our 60s --- don't feel we can start completely over!

[HHM]

I have to concur based on what I have seen so far in this thread...the attorney is insisting that you go in a chapter 13 because you have too much equity in your home.

You have two options...
1. File Chapter 13
2. File Chapter 7 and pay the chapter 7 trustee the difference between what you owe + equity exemption and the current market value. (assuming you otherwise qualify for a chapter 7).
Generally speaking, home values for BK are based on current market value.

You may have other options for you situation...but you did not share you situation, what is behind your decision to file BK...what sort of debts, etc.?

[Introuble2008]

I have to concur based on what I have seen so far in this thread...the attorney is insisting that you go in a chapter 13 because you have too much equity in your home.

You have two options...
1. File Chapter 13
2. File Chapter 7 and pay the chapter 7 trustee the difference between what you owe + equity exemption and the current market value. (assuming you otherwise qualify for a chapter 7).
Generally speaking, home values for BK are based on current market value.

You may have other options for you situation...but you did not share you situation, what is behind your decision to file BK...what sort of debts, etc.?

Sharing my situation is hard. DH and I retired, got married, then went crazy. We fixed up this house -- $10,000 owed to Home Depot. Bought a car, snowmobiles, and he owed on motorhome and motorcycle. We would have made it okay, had we been able to sell the motorhome. However, the market...HAH. Have tried to sell it for 2 years (we're upside down on it), tried to sell house for a year now (sold 2 x but lost the sales), tried to sell bike and snowmobiles. Son had borrowed large amount...should have been able to pay back okay but things turned upside down for him, too. Long story short we owe $300,000 (NOT including house) on a $6,000 a month gross income. In a year, DH's income will drop and he'll go on SS -- we'll have gross income of $4600.

[HHM]

Ok....

Quick Assessment

1. Your house has equity (which is amazing in this market). So the house is worth holding.

2. You are in your 60's and already own a home, so you don't really need good credit at this point.

3. You need a car as a practical reality.

4. It appears the bulk of you debt is related to secured debt.

Practical advice.
a. Wait to file BK until you DH goes on SS
b. Start defaulting on any asset for which you are upside down (except the car) and let the company repo that property. You can't afford them anyway (i.e the motor-home, snowmobiles etc).
c. Then revisit filing BK when your DH goes on SS.

[FreshLikeADaisy]

...this guy bugs me. Answers me thru e-mail, and then only answers half of what we ask.

That right there is reason enough not to retain this specific atty. HHM gave you some excellent advice, so you may just end up waiting a while before filing anyway. But in bk, an atty who doesn't/can't/won't answer questions for you makes the whole thing that much harder. Good luck!!!

[ssdsco]

Son had borrowed large amount...should have been able to pay back okay but things turned upside down for him, too.

Be sure to discuss this with an attorney. Could be an issue.