Filed today....YIKES!

[dhamilton30]

Well...After spending day and night for about the past 5 days, I put my petition in the mail this morning and should be there tomorrow. Now I can sit and worry if I screw anything up. In particular the Land Contract thing....another poster told me to get an attorney, which I don't have $1700 and I had to file quickly because my wages will be garnished next week and I cant afford to have that. Anyway, since the land contract was never recorded, on the statement of intentions I filled out the unexpired lease part because I don't really have any claim to the property. I'm hoping I made the right choice. I suppose I could always file an amendment. Good lord I'm driving myself nuts..lol

[debee]

Did you claim an exemption for your equitable interest in the property?

[dhamilton30]

No...I was under the impression that I couldnt use a land contract as equity..I just listed it on Schedule G and also did a statment of intentions to continue with the lease..do you think I should file an exemption? If so, how would I calculate the equity amount? I purchased the house for $40,000 5 years ago...have 15 more years to pay on it. So its not a castle or anything..lol...

[debee]

I'm not an expert on land contracts. Quite the opposite. I just read something the other day indicating that they are treated differently in bankruptcy depending which state you're in, whether they're recorded or not, who pays the taxes, etc. Some will be treated as exec. contracts and some will be treated as mortgages. The article indicated they're treated as mortgages in NY bankruptcy proceedings.

I don't know if the article is outdated, what varies by district, what the implications are for preserving your assets, if your parents risk anything, if the trustee can sell the property and pay your parents what's owed to them and keep the difference, how properties are valued in bk's in your district, etc.

I certainly commiserate with you over the expense of the attorney, but I'm not sure what you've risked by filing pro se on this without knowing the law inside-out yourself. It's not too late for you to try and get a free legal consultation. I would encourage you to do that.

edit to add: The "bankruptcy estate" is defined as all of the legal and equitable interests of the debtor as of the commencement of the case.

[debee]

Anyway, since the land contract was never recorded ...

When I said its been recorded, I only mean its on file at the county.

Not sure what you mean by "on file" at the county. I believe that once something is "on file" with the county, it's recorded. They don't keep unofficial records.

Just because you didn't pay a recording fee, don't assume it's not recorded. Recording fees vary to the point of negligible and can be paid by seller (parents) and not all counties require all documents to be notarized in order to be valid/recorded.

[dhamilton30]

is it better for it to be recorded when trying to get a homestead exemption? Would it do any good to file an amendment claiming it as an exemption?

[debee]

is it better for it to be recorded when trying to get a homestead exemption? Would it do any good to file an amendment claiming it as an exemption?

I don't know how land contracts are treated generally, even less about how they work specifically in NY. I know you have an equitable interest and your equitable interest becomes part of the bankruptcy estate. I know at one time there was a state split resulting in different treatment of land contracts in bankruptcy proceedings. My understanding (which could be flawed) is that in NY, the trustee could sell the house, pay the mortgage and distribute the difference to creditors. Same as if the land contract were a mortgage loan. And now you know everything I know.

I don't know, dh. It seems like you are risking 10k in order to save 2k. It doesn't add up.

edit: Sorry, I don't know if it's as simple as just filing an exemption for your equity as if it were a mortgage. Did you file any information about your equitable interest?

[dhamilton30]

I need to clarify the balance remaining as well.....my remaining term on the contract is for 15 years at $302 per month...so about $54,000. The house was only appraised at $45,000 when purchased 5 years ago. The principle remaining is about $30,000....$54,000 with interest..if that makes any sense. I'm not on the deed to the home or anything of the sort. My agreement to make installment payments is all I have. The property owners (my parents) maintain the deed and title. Once the debt is paid, they will transfer it over to me. BTW..thanks for the discussion...I need it..I'm going nuts right about now.

[debee]

I need to clarify the balance remaining as well.....my remaining term on the contract is for 15 years at $302 per month...so about $54,000. The house was only appraised at $45,000 when purchased 5 years ago. The principle remaining is about $30,000....$54,000 with interest..if that makes any sense.

When determining the value of the property for the purposes of bankruptcy, you need to know what the property would sell for today. That will tell you whether you are upside-down, break-even or have "equity" in it. It doesn't matter what your total payments will be over the life of the loan, or what you bought it for five years ago. Real estate values tanked, but there are some micro-climates where values went up. Some neighborhoods held their value. Others tanked abominably. (note: your remaining principal balance is what you subtract from the current market value to find out if you're upside-down, etc. Do not include the interest you will pay.)

I don't know how the differing property value possibilities impact your case. And neither do you. That's the real problem here. You don't know!!

If you're upside down, getting a reaffirmation agreement approved is not likely. True for mortgages. Don't know about land contracts.

If there's equity in the house, and if NY treats land contracts like mortgage loans, the trustee can sell the house, pay the mortgage lien off, give the difference to your creditors, (Less your exemption).

I have no idea what the trustee will do in each of the scenarios if your land contract is treated as an exec. contract. But neither do you!!

I'm not on the deed to the home or anything of the sort. My agreement to make installment payments is all I have. The property owners (my parents) maintain the deed and title. Once the debt is paid, they will transfer it over to me. BTW..thanks for the discussion...I need it..I'm going nuts right about now.

I know you're not on the deed, but that doesn't mean you don't have some rights to the property. You do. The bankruptcy code spells out what becomes property of the estate upon commencement of your case. Your equitable interests become property of the estate. This is a definition of "equitable interest" that I just copy/pasted a second ago: The interest held by the buyer of real property under a land contract. The equitable right to obtain absolute ownership to property when legal title is held in another's name.

This is all stuff you need to get sorted out right away. Maybe you can hire an attorney just to answer a few questions on this topic. You know, an hour long chat about land contracts and bankruptcy. Get some advice about what you need to do with your filing and this issue.

I wish I could offer you some help. I can't. We're like two dummies here. Really. Neither one of us knows anything on this subject. But I'm the only one with nothing to lose.

edit: your equity position (if you have one) is the difference between the current market value and your principal balance.

[dhamilton30]

You mentioned exemption...NYS gives a $50,000 homestead exemption. So, If I amend my petition to include the exemption, whats the worst that could happen if I wasnt entitled to it?

[debee]

I don't know. I don't know about NY land contracts. There was someone on the forum who encouraged you to hire an attorney in your earlier thread. That guy was the most knowledgeable pro se filer on this forum. You won't find a sharper tack. Or better advice. Really.

[dhamilton30]

If I had the money to hire an attorney, I would have done it by now. I'm between a rock and hard place. I guess I'm just gonna have to hope for the best. Worse comes to worse I will not attend the 341 hearing and get an involuntary dismissal rather than losing the house. At least before I filed the creditors had not claim to my house.

[debee]

I really hope it works out for you.