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Can we file for bankruptcy when we have more than $300k in home equity, NY state
Seaford, NY
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Posted about 1 year ago in Bankruptcy / Debt
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personal bankruptcy:
i live in the state of NY, i have a home worth between 480-510K my first mortgage is $162K i have equity line with a balance of $49K and my wife and i have 80k in credit card debt. would we be able to file bankruptcy ?
can the credit card companies force you to sell or place a lien on your property? - Is this your question? Add additional information Answers (1)
Dainen N Penta
This attorney is licensed in Washington.
Posted about 1 year ago.
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When you file for bankruptcy, the trustee reviews your case to determine if s/he can sell your home and pay your creditors on your behalf. There must be something left over after exemption(s) which apply, any liens on the home, and costs of sale are considered. You could also file a Chapter 13, but your repayment plan must pay back at least as much as your creditors would have received in a Chapter 7 case. In your case that appears to be 100% of the debt you owe.
Even given the depressed state of the housing market right now, I am having trouble understanding why you are considering bankruptcy. Assuming that the costs of sale are 9% of the sale price, you would receive $225,800 at closing if you elected to sell your home and you accepted an offer for $480,000. Even after your credit card debt is paid in full, you would have well over $100,000 to use for living expenses or for the down payment on a new home, and your debt-income ratio would invariably be improved. Certainly, your situation may be more complex than just the $80,000 credit card debt, but if you were in my office I would advise you not to file for bankruptcy. In answer to your second question, creditors can sue you and will obtain a judgment against you. The judgment may automatically become a lien on your property, or the credit card company may need to file it in the county records. In any event, this doesn't need to happen because the equity in your home indicates you can sell your home and pay your debt in full. Please consider contacting a bankruptcy attorney in your area who can properly evaluate your situation and give you appropriate advice, since New York law will have bearing on your legal options. Dainen Penta, Attorney Spencer | Anderson | Buhr PLLC dainen@spenceranderson.com http://www.spenceranderson.com +++++++++++++++++++++++++++++++++++ This answer is provided as general information only. It’s not intended to be legal advice, and you should not take action based on this information. Only a lawyer licensed in your state can discuss your situation in detail with you and provide you with legal advice. +++++++++++++++++++++++++++++++++++ |
