What would happen to my positive equity if I file for bankruptcy? 13 Answers as of May 05, 2015

If I file for chapter 7 bankruptcy, what will happen to the positive equity that I currently have in my house?

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GARCIA & GONZALES, P.C. | Richard N. Gonzales
Depends on how much equity. This is no time to skimp. Pay an experienced BK lawyer for a face to face meeting. You will get what you pay for! You want all of your questions answered before you file. I have had many people over the years come to me after they filed, and want questions answered. This is a much more expensive proposition. Good luck!
Answer Applies to: Colorado
Replied: 5/5/2015
Law Office of Michael Johnson
Law Office of Michael Johnson | Michael Johnson
Homestead is exempt.
Answer Applies to: Florida
Replied: 5/4/2015
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
That depends on a number of factors: 1. How much equity there is. 2. Which states exemption laws apply in your case 3. What exemptions you have available under those exemption laws. 4. The value of other assets you need to exempt. Only way to find out is to have a consultation with an experienced bankruptcy attorney and provide them with all the necessary information.
Answer Applies to: California
Replied: 5/4/2015
Ronald K. Nims LLC | Ronald K. Nims
Ohio had a $125,000 exemption for home equity ($250,000 for a couple). If your equity is under that, it doesn't count against you in a bankruptcy. If you have more equity than that, you'll have to pay it for distribution to your creditors.
Answer Applies to: Ohio
Replied: 5/4/2015
Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
It depends upon where you live and how much equity you have. With what is at stake it makes sense for you to schedule a consultation with an experienced bankruptcy lawyer. Anything you pay in legal fees will be well worth the peace of mind you will have in knowing that things are being done correctly. If your home is at risk, a lawyer will be able to advise you of that fact, and also, be able to discuss options and strategies that might allow you to get debt relief AND keep your home as well.
Answer Applies to: Colorado
Replied: 5/1/2015
    John W. Lee, P.C.
    John W. Lee, P.C. | John W. Lee
    If you can not exempt the equity in your house, then the Trustee will sell the house to raise money for the benefit of your creditors. If a debtor has too much equity to exempt, he may be able to file a chapter 13 bankruptcy and keep the house. You should contact an experienced local attorney to help you protect your home.
    Answer Applies to: Virginia
    Replied: 5/1/2015
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    I would recommend that the positive equity in your home be protected by recording a Declaration of Homestead at the county recorders office. State exemption laws can usually protect all of your equity in your property, but the devil is always in the details. You need to be eligible to claim state exemptions to be completely sure you won't lose any valuable property when you file bankruptcy.
    Answer Applies to: Nevada
    Replied: 5/1/2015
    Highpoint Law Group PLLC
    Highpoint Law Group PLLC | Jeffrey L. Smoot
    If you live in your house or have properly declared it as your homestead, you can exempt up to $125,000 in equity in your home under Washington's homestead exemption statute. If there is more than $125,000 in equity in your home, the bankruptcy trustee may decide to list it for sale. To avoid a sale, you could negotiate with the trustee to buy the house from your bankruptcy estate for the amount of the net equity above the homestead exemption. It will depend on your particular situation.
    Answer Applies to: Washington
    Replied: 5/1/2015
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    Depending on the State where you live, you can choose either federal or state exemptions unless state law prohibits use of the federal exemptions. In Wisconsin, the state exemptions are permitted in bankruptcy, and you can exempt up to $75,000 of equity if one debtor owns the home, and if it's a joint filing, you can exempt up to $150,000.00. The federal exemptions are approximately $24,000 per spouse.
    Answer Applies to: Wisconsin
    Replied: 5/1/2015
    Tokarska Law Center
    Tokarska Law Center | Kathryn U. Tokarska
    You can get the answer to that question only by doing an exemption analysis. Assuming you are in California and are eligible to use California exemptions there are two sets of exemptions in California. you can use one or the other but not both. They differ in the types and amounts of assets they cover. The set which contains a homestead exemption has smaller exemptions for other type of property and no wildcard exemptions. The safest thing to do is discuss with your attorney the extent and value of your assets, including the equity in your home. If all the assets can be exempted you can keep the assets. If some assets are non exempt, the Trustee has a right to sell the asset and use proceeds to pay creditors.
    Answer Applies to: California
    Replied: 5/1/2015
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    If you have equity you should see a lawyer. It might be "exempt" but you have to be wary of a chapter 7 trustee holding your case open so that more equity is acquired. You may find a lawyer at nacba.org. See the attachment.
    Answer Applies to: California
    Replied: 5/1/2015
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    You get $150,000 homestead exemption in NY (downstate) and $300,000 if you are married and both on the deed.
    Answer Applies to: New York
    Replied: 5/1/2015
    Garner Law Office
    Garner Law Office | Daniel Garner
    Filing a bankruptcy does not do anything to the equity in your house. It is still the difference between the market value and the debt secured by the property. Typically, the homestead exemption available to you is expressed as a dollar limit on the equity, and values over the dollar limits would be considered "non-exempt equity" available for the trustee to liquidate for the benefit of your creditors. Of course, to get that equity your house would have to be sold, or you would have to pay the trustee an amount equal to the non-exempt equity. The homestead exemptions vary greatly between states, and sometimes you can choose between the federal and state exemptions. Only a licensed attorney can advise you on the specific exemptions that apply to your case, but it may be that your equity would all be exempt or protected in a bankruptcy. If you need to file bankruptcy and you want to keep your house, you would be foolish not to get legal advice first.
    Answer Applies to: Oregon
    Replied: 5/1/2015
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