I recently filled Chapter 7 Case California. Wanted to keep house (slightly underwater), filled purely to eliminate credit card debt. Made clear to my lawyer most important thing is to keep house. Mortgage is current, already got loan modification four years ago which lowered mortgage $1000 a month. Really like house and can afford mortgage. Put house as exempt, retain and pay on bankrupsy documents. Homestead exemption on house at county office. Trustee is now trying to short sale house to do carve out. My lawyer said just go with it, looking for new lawyer. Mortgage, small local bank, they do not want sale, but trustee keeps trying to sell. Afraid lender will cave. Can't dismiss my case or I would. Can I fight trustee and prevent sale? Chapter 13 pointless due to means test income.
Error. I did not check exempt on documents as house is underwater. I checked retained and in other: retain and pay.
This is a recurring problem recently. Make sure you have claimed the homestead exemption, provide the trustee with proof that you are making the payments on the house, and oppose the trustee's motion to sell. The means test results do not necessarily mean you cannot convert to Chapter 13. If you can find the means to make a small Chapter 13 payment, even with the help of a family member or friend, you should be able to convert so long as no bad faith is involved. These are my two cents - I have not encountered this problem in any of my cases but we always exempt the home even if it's only $1.
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I agree with Attorney Larkin. You need experienced bankruptcy counsel if you hope to get through this. If I were you, I would give her a call.
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You may be able to stay in your Chapter 7, but you are going to have to find an experienced attorney to help you. And, you need to it quickly. Find another attorney, get a Broker's Price Opinion on your house and do it now. Good luck.
We are just seeing this happen, here, in Florida, when a clients choose to exempt their personal property (called a wildcard exemption here) rather than claim the house. I agree with Ms. Larkin. I'd immediately amend schedules to exempt your homestead, & argue it was an unintentional mistake not to exempt, and fight the short sale. If that didn't work, I'd convert to a chapter 13. A chapter 13 should prevent the chapter 7 trustee from short selling the property, as chapter 13 debtor's property vest with the debtor.