BK and want to keep my house

[NDebt]

We just started the process to file BK. I'm thinking Ch7, since we fail the means test majorly, and I want/need to keep the house and cars.
However.... It appears our house may have too much equity in it. I talked to the lawer about this today, he told me to get an appraisal on it, which happens tomorrow.

My question is - what happens if we do have too much equity, yet fail the means test..is 13 still a posibility and how much debt is paid back in a Ch13?
I still have much to learn, so thanks for indulging my stupid questions.
Oh, and I can't access my equity obviously since my credit sucks. It's anywhere from 12k - 31k depending on the appraisal and what the exemption is, which I'm reading as 2 seperate things now - does the exemption get doubled if you are married and both filing bk?

[lrprn]

My question is - what happens if we do have too much equity, yet fail the means test..is 13 still a posibility and how much debt is paid back in a Ch13?

It all depends on how much equity your state allows in their bankruptcy exemptions vs. the true equity in the home. What state will you be filing in?

The risk in having too much equity is that if your state's exemptions can't protect all of it, then it could be worth your trustee's time to go after the house forcing you to sell it or pay the trustee the difference between what your homestead exemption protects and how much equity there is. That's why your lawyer wants the appraisal.

Something you can do to help give a more rounded picture than a single appraisal is to investigate how much realtors are currently listing similar properties for in your area. This can be particularly telling due to the recent downturn in the housing market values nationwide.

The one thing you do *NOT* want to do is use the tax appraised value for your property. These are routinely overvalued.

does the exemption get doubled if you are married and both filing bk?

Depends on the state you file in. Some states double the allowed homestead exemption for married couples who co-own the home and file together, but most do not. Again, which state are you filing in?

[NDebt]

I just did a little reading in the exemption forum, and found out it's 15k for homestead in MO and we don't get to double. :sigh: I have a feeling we are screwed.
So, let's assume my equity is 34k. CH7 is most likely out, and we go with Ch13.
I can't pull 34k off my money tree out back, and the trustee takes pity on me and my small children and don't make us sell the house. I assume the 34k is part of what I have to pay back during the Ch13 + what? (since I have no disposable income according to the means)

[gophermn]

Don't over-inflate your equity. I mean, I am sure you have the equity built in your house but unless you have comps and/or appraisal you really are not sure.

What I am saying is the Trustee will ask what your house is worth and if it could be sold for that amt today. ROFL - in todays market - yea right bub. A close friend just had his house appraised last week and his appraisal WENT DOWN because of the foreclosures in his neighborhood.

Anyway, you might be able to qualify for CH7 pending the comps in your area.

[lrprn]

I just did a little reading in the exemption forum, and found out it's 15k for homestead in MO and we don't get to double. :sigh: I have a feeling we are screwed.

A question for you .... MO does allows property held in tenancy by the entirety between husband and wife. That means the house may be exempt against debts owed by only one spouse. Are both your names on the house deed and on the mortgage(s)?

So, let's assume my equity is 34k. CH7 is most likely out, and we go with Ch13.

Here's the problem - you MUST show sufficient disposable income to support a Ch 13 plan on your Means Test and Schedules. You have to be able to pay at least as much as your creditors would have gotten if you filed Ch 7.

Sounds like everything is going to hang on what the appraised value of your home is against the $15000 allowed in MO. Here's hoping for an appraisal that keeps you on the low side of equity.

Please keep asking questions - we'll help you sort things out as we can. Also keep asking your lawyer questions - he's most familiar with your situation and what's going to fly and what's not in your local bk court and its trustees. Keep us posted about what you find out, ok?

[NDebt]

A question for you .... MO does allows property held in tenancy by the entirety between husband and wife. That means the house may be exempt against debts owed by only one spouse. Are both your names on the house deed and on the mortgage(s)?

The mortgage is in my husband's name only, the deed is in both our names.
A couple of our credit cards are in both names, 1 is in his name only and I think 2 are in my name only.

Here's the problem - you MUST show sufficient disposable income to support a Ch 13 plan on your Means Test and Schedules. You have to be able to pay at least as much as your creditors would have gotten if you filed Ch 7.

Sounds like everything is going to hang on what the appraised value of your home is against the $15000 allowed in MO. Here's hoping for an appraisal that keeps you on the low side of equity.

Please keep asking questions - we'll help you sort things out as we can. Also keep asking your lawyer questions - he's most familiar with your situation and what's going to fly and what's not in your local bk court and its trustees. Keep us posted about what you find out, ok?

I never thought I'd pray for a low appraisal on my house.
Thanks for your help everyone. The appraiser comes this evening, I figure it will be a day or 2 before we get some numbers back, & the lawer mailed our paperwork yesterday to start this whole thing. I'm hoping we can meet with him next week to see where this whole things stands. My stomach is in knots about this whole situation.

[lrprn]

The mortgage is in my husband's name only, the deed is in both our names.

Since only your husband owns the debt on your home and MO is not a community property state, ask your lawyer about property held in tenancy in the entireity and see if that can help protect your house no matter what the equity turns out to be.

A couple of our credit cards are in both names, 1 is in his name only and I think 2 are in my name only.

When you file together in a non-communty property state like MO, you both list all your non-secured and secured debt. This way all your debt is dealt with when you file.

I never thought I'd pray for a low appraisal on my house.

We're all hoping for that for you too!

My stomach is in knots about this whole situation.

We've all been where you are right now. Knowledge is power in this situation. Learn all you can about bankruptcy - that way you can protect your interests and understand more about the recommendations your lawyer is suggesting. Hang in there - we're here for you whenever you need us.

[NDebt]

Since only your husband owns the debt on your home and MO is not a community property state, ask your lawyer about property held in tenancy in the entireity and see if that can help protect your house no matter what the equity turns out to be.

I'm not sure what this is, but I'll definatley be asking my lawyer about it. Got the appraisal back today - 272k. The payoff on my house is just under 225k. Normally I'd be estatic about all the equity in my house already, but eh, now I'm just super nervous about it.

Got the paperwork to fill out from the lawyer, what a pain in the butt. I've got most of it done, but have no idea what to put for market value on my stuff (clothing, furniture, jewlery, etc). Do most people just guesstimate, or research this stuff on ebay, craigslist, etc?

Hoping to get a meeting with the lawyer this coming week. I've been sued by one of my credit card companies and the court date is 4/2 - so I'd like to avoid going if I can. Having to go to court scares the bejezzus out of me.