The four main reasons why clients will file Chapter 13 are:
- Means Test Qualification
- Asset Protection
- Prior Chapter 7 case within 8 years.
- Foreclosure.
Foreclosure and prior case filings are usually simple if/then checkoffs that most callers will have understood well during their own research.
Asset exemptions and the Means Test are more complex topics. Plenty of times I'm the first contact with a solid understanding of these topics. That can make me the bad guy. Read on:
Means test failure.
Unexempt assets.
Can a person lose their home if they file for bankruptcy. This property was only purchased a couple years ago, and because its value has gone down, the owner owes more than its worth.
ReplyDeleteIt is always possible to loose a home while filing Chapter 7. That's the point of this blog article.
ReplyDeleteAs a BK worker, one of the first questions on my mind is: does this case fit best in Ch7 or Ch13.
Asset protection is one of the main uses of Ch7.
So, for your case, the question comes down to: what is the value of the home today?
By your description, there is no equity in this home. So, a sale would not be forced by the trustee. You'll want to back that up with an appraisal. The trustee could always get a competing appraisal if he doesn't believe you.
But in this case, I think keeping the home or not would be up to the debtor.