Chapter 7
I must apologize if this question has already been answered but I am new to "news" and so here it goes. When I file for Ch7 (no job, no income, an old car and a bare minimal household), how is the "allowable" equity in my house determined? It is my understanding that a "small" amount of equity is allowed. I might be able to find a friend that will keep my current mortgage up to date. Do my non-exempt debts need to be larger than my equity or am I going to put in the street one way or another? How does one pay for a lawyer when the money has long since gone? Thank you for any kind response, I really can use it just about now.....
Answer:
The equity is the net remaining after the mortgage(s) payoff, sales expenses (usually 10%) and other liens are subtracted from the market value of the house. Depeding on which state you live in and the details of your case, you may be able to exempt some or all of the equity and keep your house despite the bankruptcy. (And if there is no equity, you can keep the house as long as the payments are kept current.) I have written a Bankruptcy FAQ which should answer many of your questions about what is involved--it may be found at http://users.erols.com/lawyer/FAQ/br_faq.htm. I strongly recommend speaking with a local bankruptcy attorney. Most offer free initial consultations and he or she should be able to review your specific situation and let you know what you can and can't do. If you're in Maryland, DC or Virginia, please let me know--we may be able to help. Take care.
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