Expert: Terry Leeders - 5/15/2008

Question
Almost 2 years ago, I filed for Chapter 7.At that time was told it would take 4 months tops and I definitely qualified for it.Advised lawyer I DID NOT want to file a chapter 13, she said 'not a problem'. Now that it's been to court it has been denied and turned over to a trustee.2 years ago, when I originally filed the tax value on our home was only $87,000 and we owed $79,000 which was not a problem. But since it has taken my so called lawyer so long, the county I live in did a new tax evaluation and the tax value came back at $147,000. The trustee is now saying I may have to sell my house.(I am married but my spouse is NOT filing), OR possibly file a chapter 13. I do not want to do either one. I DO NOT want to lose my house!! It is the only thing my family has!!! My question is this: What are my options? If I have to sell my home I want to cancel this bankruptcy altogether, is that possible? Can anything be done about my lawyer taking 2 YEARS to do anything? We were assured over and over again that I would NOT lose my home, that I definitely qualified for a Chapter 7. What can I do??? Please help me! I live in North Carolina. Thank you.

Answer
I am slightly confused. You said you 'filed' your chapter 7 2 years ago.  Did you just hire the lawyer at that time or do you have a case #, beginning with 05- or 06-? As in most cases, the attorneys fees must be paid in full before the case is filed.  The value of your assets is taken at the date of the case being filed, not the date you hired the lawyer.  So, the actual value at the time of filing is what will control.  You should get an actual appraisal instead of the county tax evaluation, as those are not that accurate in my opinion.  I am not licensed in North Carolina, so I don't know the exact exemptions, but I did see this online:
""Exemption laws protect some property from being taken by creditors if a person is sued. Exemptions also protect bankruptcy debtors. North Carolina exemptions apply to someone who files bankruptcy in the state of North Carolina, if they have lived in North Carolina for two years or longer. If they have lived in North Carolina less than two years, then either Federal Exemptions of the exemptions of a former state apply.

The North Carolina Laws allow each resident to exempt (protect or withhold) from creditors, up to $18,500.00 in their residence, or in the residence of their dependent.""

Now, you need to speak to a local attorney in your state to properly advise you as to what exemption you can use in your case.

Once a case is filed, you can try to bring a motion to voluntarily dismiss the case, and it will be up to the judge to decide, which they often do not, since the assets are available for creditors.  I do not know why the attorney waited to file, you need to discuss that with them.  Chapter 13 is a good option when there are too many assets that you need to protect, and you would pay back a portion of the debt to protect those assets.  You should talk to your lawyer and have them answer your questions, and if not, then you should seek out other counsel as this is very crucial issue to you.