Declaring bankruptcy without losing equity?

[mystic]

Hello, I am new here, I came here to ask a very specific question please. I lost my main job and simply can't make both my credit cards and my mortgage payments anymore, I can only make the make the payments of one or the other, what I am being told is that all of my credit card bills will be taken care of but I will lose the equity on my house, is this true? if so, is there any way for me to declare bankruptcy and not lose any equity on my house? Thanks.

[whipster1]

Depends on your state how the equity is treated.

[JoeBankrupt33]

Mystic, what state are you in? Every state has their own bankruptcy exemptions which cover things like equity in a home.

[mystic]

I am in NY

[keepmine]

NY exempts $50K.

http://www.bankruptcyaction.com/nyexemptions.htm

[mystic]

So if I understand this correctly, if I were to owe more than 50k to credit cards and other bills, only any amount OVER 50k would then be taken from the home's equity?

[JoeBankrupt33]

Nope. If you have more than 50k in equity in your home, and you declare bankruptcy, then the trustee may potentially sell your house, give you the 50k equity you're allowed, and use the balance to pay off your other debts. If there is money left after that, it would go back to you.

[OhioFiler]

How much equity do you have in your house right now?

[mystic]

around 125k I am guessing

[StartingOver08]

Get a new valuation of your home based on today's market. If you can't afford an appraisal have an experienced Realtor come out and give you an accurate market analysis (free) with a quick sale time 30 days or so. Comps need to be sold properties that are similar to yours that have sold AND closed within the last 90 days. This will give you a more accurate idea of value.

If you can only afford to make one payment or the other - stop your cc pmts and keep your house JMO.

[mystic]

Don't understand how I can stop the CC payments without getting sued by the card companies?

[OhioFiler]

Don't understand how I can stop the CC payments without getting sued by the card companies?

Well if you stop paying your mortgage you'll get sued too.

[mystic]

So I guess my only option is to declare bankruptcy and get the equity taken off?

[StartingOver08]

You can file a Ch 13 and protect your house and still pay only a percentage to the cc's (can be as little as zero percent). JustBroke and HHM have better answers reqarding filing Ch 13's...but Ch 13's are used to protect your home and other assets

[whipster1]

Divide the amount you are trying to protect by 60 and that will get you a starting point of what a 60 month chapter 13 would look like as far as payments go. If you have 75K unexepmt equity that is a chunk of change, 1250 per month, plus the atty fees and the trustee fees.

You might be better off selling unfortunately...