Expert: Dick Dennis - 6/24/2008

Question
My parents have been repaying their chapter 13 for about a year.  I am wondering how difficult it will be for them to sell the house. The home is in San Bernardino County CA.  They, like many others owe more than what the house would appraise at currently.  I am concerned my parents may end up having to walk away from the home even though they have been able to make their house and trustee payments.  How hard will it be for them to possibly sell the house while still in repayment or purchase something if they find they are unable to sell it for what they owe and end up with it in foreclosure? It seems to me that the bankruptcy only put off the inevitable and with their plans of retiring before the real estate market eventually recovers I would just like some information on how I can possibly aid them with this tough situation.

Answer
Yes, Erin, this is a tough situation all right. If your parents have been paying on a chapter 13 repayment schedule it seems to me that they are getting along all right. But if they want to sell their house, it does not appear that they will be able to come away with any equity. Their chapter 13 attorney or trustee would be able to answer that question. However, while a chapter 13 ruins their credit for more than a few years, there are ways to escape that trap. Only thing is they may not be able to actually buy the house they want. But they would be able to buy a house. You need someone who knows how to handle such a purchase. It appears that they are about 30 miles from my office. I might be able to help them. But first find out from their attorney or trustee if all this is possible with their schedule. I do wish you well.

Dick Dennis     dixiedee13@aol.com