If I have a reverse mortgage on my house, and I am filing for Chapter 7 bankruptcy, do I still claim a homestead exemption?
Orlando, FL |
I have a reverse mortgage, but I have more personal property to protect. I technically only have a life estate in the property, although I do claim it as my homestead. Does it still need to be claimed as an exemption?
If you are planning on staying in the house, you need to claim the homestead exemption. Otherwise, your interest becomes property of the estate. The other question is what type of life estate, standard or an enhanced life estate. Under the rights circumstances, the trustee could then sell the property from under you. In Orlando that has happended. I would also suggest having an attorney represent you in this matter and to review the terms of the reverse mortgage. You have other options with regard to the personal property and how to protected it. In such a situation, do not do this alone. Have a well qualified attorney assist you. In the long run it will save you time, aggregation, and possibly money or assets.
The response given is general in nature and based upon limited information. It does not and cannot replace that of a proper consultation with a qualified attorney. You should not act upon this Information alone, but should seek legal counsel prior to taking any action.
You have a way more significant problem than whether to claim a homestead or not. If your reverse mortgage is providing you with monthly payments, unless you retain an attorney experienced with reverse mortgages, when you file bankruptcy your monthly payments under this contract will stop and you will no longer have this income. Do not try to cut corners by going with the young cheap attorney unless you want the cost of paying for his/her education to be enormous! Hope this perspective helps!
If you are living in the home, & you intend to keep doing so, you should claim homestead. I have had clients' mortgages stop making payment to them once a bankruptcy was filed. I was able in each case to make the mortgage company resume payments, and pay sanctions for their discontinuance of payments. Mr. Keller is correct. You do need an attorney's help. I have offices in Orlando and Merritt Island, and would be happy to give you a free consultation.