Bankruptcy Law/home equity

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Expert: - 5/13/2006


Question
I have a home in my name, my nieces name and her husbands name on title. They, however, are not on my loan documents, just the Title. They pay 1/2 the mortgage every month and reside in this house. I am in the process of thinking about filing bankruptcy. I went to a credit counselor- Greenpath and they said they couldn't help me based on my income. If I file bankruptcy, is my house protected from going under the bankruptcy? I am current on my payments and we have equity in the home or would I be forced to sell it to pay off the creditors? Please advise. The market value is $190,000 and We owe approx $158,000. Thank you for you time

Answer
For the most part, it depends on where you live. The home equity you can keep when filing for bankruptcy varies from state to state. Another consideration is home value...some real estate markets have skyrocketed in value. For example, in California where I practice law, I have seen many people who filed, believing that California's generous homestead exemptions were enough to protect their homes. Then they find out that the home is worth double what they thought, (or at least alot more than they ever dreamed it could be)and they face having the bankruptcy trustee sell the house!

Here's two things you need to do immediately. Get a good evaluation of your home's current market value so that you will have outside guidance on this. It's best to consult more than one source. The second thing is for you to go see an attorney specialist in bankruptcy for a consultation.  

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Los Angeles Bankruptcy Lawyer Leon D. Bayer

Expertise

Leon Bayer has successfully represented clients in bankruptcy for over 30 years. He is frequently called upon by the media, the California Bar and other associations to provide insight and help educate attorneys on bankruptcy issues. If you or other readers want to keep up with my blog postings about life in and out of bankruptcy, you can follow my blog at http://www.bankruptcyblogger.org/ and my personal web site at http://www.debt-relief-bankruptcy.com and A Human Guide to Bankruptcy at http://www.thebankruptcyguide.net/ Leon also writes about bankruptcy law for Nolo, see http://www.nolo.com/law-authors/leon-bayer.html and his "Ask Leon" bankruptcy law blog column at http://blog.nolo.com/bankruptcy/

Experience

Leon is a Certified Specialist in Bankruptcy Law by the State Bar of California, and has been a practicing bankruptcy lawyer in Los Angeles, California for 33 years.

Organizations
National Association of Consumer Bankruptcy Lawyers, California Bar Association, Los Angeles County Bar Association.

Publications
Author, ?The Essentials Of Chapter 13,? Daily Journal Report, December 18, 1987.
Contributing Editor, Basic Bankruptcy, California Practice Handbook, Matthew Bender 1992, 1993.
CEB Consultant, CEB-Personal and Small Business Bankruptcy Practice in California, 2003.


Education/Credentials
B.A., J.D.

Awards and Honors
President, 1995-1996-Los Angeles Bankruptcy Forum; Member - Los Angeles County Bar Association Committee on Commercial Law & Bankruptcy, 1988. Law Advisory
Commission-Personal & Small Business Bankruptcy Law of the State Bar of California, 1996-2000

MR. BAYER SAYS: The big banks and credit card companys have been working overtime for many years to undermine the Consitutional right of the American people to be able to claim bankruptcy protection. In 2005 the banking lobby successfully convinced Congress and the President to make the laws and proceedures more complicated, hopeing that it will stymie legitimate people from filing bankruptcy. They succeeded in gaining these complex new legal proceedures by greasing the legislative system with hundreds of millions of dollars in "campaign contributions." The good news for the American people is that while the new laws have made the proceedures needlessly complex to the point where inexperienced people can't help but trip over the maze of new rules and regulations, the process is still doable, especially with a lawyer who is well trained and experienced in this specialty.

Past/Present Clients
I have probably handled something on the order of about 15,000 bankruptcy cases thropughout my career.

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