Chapter 7 - equity in house very close. Will Trustee accept Zillow Zestimate/repairs

[nednj36]

We want to file Chapter 7 and not 13

We owe $190,000 in mortgage liens and Zillow median estimate is $295,000. The house needs major repairs (not renovations for improvement)

1. Will the Trustee accept Zillow Zestimate as value or do I need a realtor market analysis?

2. The house easily needs $25,000 in repairs to make it presentable for sale. Our BK attorney said to get a contractor to write up necessary repairs so we can use it combined with allowable NJ exemptions to bring us to $260K range and qualify for thr Ch 7. We already passed the means test for income.

Thoughts and feedback greatly appreciated!

[jst4f]

Zillow is a poor source for valuation of your home. Get a CMA, BPO or a formal appraisal. We used BPOs and they were accepted without question. Why is $260k your target? As presented you could have $25k in equity which the TT will go after. You will lose the house. I also don't understand the connection between the value of the house and whether you qualify for BK7 versus BK13.

[LadyInTheRed]

Yes, Zillow is a poor source for valuation. But, my attorney used the Zillow value on my petition and the lien strip petition. If anybody (the mortgage holder or the trustee) contested the value, we would have had to either reach an agreement on a value with the contesting party or provide evidence of the value so the judge could make the deicsion. Zillow would have been terrible evidence, so I would have had to get an appraisal. Nobody objected to the value, so the Zillow value worked fine.

The trustee will only see the value you list on the petition, without any explanation of how you determined the value. If he questions it, your attorney will present the evidence to the trustee, including the contractor's estimate of repairs. If you can't reach agreement with the trustee about the value, you'll take it to the judge.

If it turns out you can't exempt the entire value of your house, would you be okay coverting to a Chap 13 or giving up your house in a 7? If not, then get a CMA, BPO or formal appraisal before you file so you know where you stand. If you are willing to convert or give up your home, do no more than what your attorney recommends.