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Struggling to pay bills, but still have decent credit however i need to file chapter 7

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Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

a new problem has arisen its ugly head, the county says the house is worth about 20k more than what we paid for it.

So the homestead exemption of 5,000 according to a local attorney will not save the home being that the named person wanting to file chapter 7 has no children to up that number to 25k of exemption.

anyone have any input here?

Message 11 of 17
Moderator Emeritus

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7


@Underconstruction wrote:

why do you say stay current, but then say everything will be wiped anyway?


@Tuscani wrote:

Stay current and of course avoid filing if you can. But do not be ashamed if you have to file. Also, paying right up to filing does you no good as all payment history and balances will be wiped away anyway after you file. 


 


I am just saying stay current as in do not file if you can avoid it. But it you do decide to file staying current that point forward does you no good. 

Message 12 of 17
Moderator Emeritus

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7


@Underconstruction wrote:

a new problem has arisen its ugly head, the county says the house is worth about 20k more than what we paid for it.

So the homestead exemption of 5,000 according to a local attorney will not save the home being that the named person wanting to file chapter 7 has no children to up that number to 25k of exemption.

anyone have any input here?


Your local lawyer is going to know best. I would say though, with no additional exemptions and dependents, having $20k of equity in your home could be enough for the trustee to sell your home, or the non-exempt equity. But don't the value of your home by the tax assessed value. Depending on the region, these values are typically not in alignment with appraised values. It may be worthwhile to get a broker's price opinion and/or a full appraisal. Your attorney should be able to tell you what will be an acceptable determination of value in your jurisdiction, though. You also have the option to buy the non-exempt portion from the trustee if you are able. 

Message 13 of 17
Contributor

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7


@Tuscani wrote:

@Underconstruction wrote:

why do you say stay current, but then say everything will be wiped anyway?


@Tuscani wrote:

Stay current and of course avoid filing if you can. But do not be ashamed if you have to file. Also, paying right up to filing does you no good as all payment history and balances will be wiped away anyway after you file. 


 


I am just saying stay current as in do not file if you can avoid it. But it you do decide to file staying current that point forward does you no good. 


I don't think that's accurate.  If you have 30 day lates on your reports prior to filing BK, those 30 day lates will be on your reports for 7 yrs, along with the BK for 10 yrs.

 

So how does having fewer negatives, NOT help in the credit rebuild?  

 

I could easily have had about (35) 30-60 day lates on my reports before filing....If that happened, my scores would probably be below 500 before i filed.  I ended up having (5) 30 day lates and am now hovering high 500's about 45 days after my 7 filing.

 

 

Message 14 of 17
Moderator Emeritus

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7


@twono wrote:

@Tuscani wrote:

@Underconstruction wrote:

why do you say stay current, but then say everything will be wiped anyway?


@Tuscani wrote:

Stay current and of course avoid filing if you can. But do not be ashamed if you have to file. Also, paying right up to filing does you no good as all payment history and balances will be wiped away anyway after you file. 


 


I am just saying stay current as in do not file if you can avoid it. But it you do decide to file staying current that point forward does you no good. 


I don't think that's accurate.  If you have 30 day lates on your reports prior to filing BK, those 30 day lates will be on your reports for 7 yrs, along with the BK for 10 yrs.

 

So how does having fewer negatives, NOT help in the credit rebuild?  

 

I could easily have had about (35) 30-60 day lates on my reports before filing....If that happened, my scores would probably be below 500 before i filed.  I ended up having (5) 30 day lates and am now hovering high 500's about 45 days after my 7 filing.

 

 


I am referring more to paying in general once you decide to file not credit history. Bankruptcy does not erase your credit history. 

 

The accounts should show with a $0 balance and Included in Bankruptcy (IIB) or something else that indicates that it was discharged in bankruptcy.  The fact that you file bankruptcy and the account was IIB is, in and of itself, a negative mark. At least that's my experience. Which begs the quesiton, does the IIB notation supercede the previous payment history up to and prior to filing in terms of how it impacts a score? Not sure. 

Message 15 of 17
Contributor

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

....to add to this, interstingly enough, about 3 of the 5 (30) day lates have been removed from my reports for now.  I'm at the halfway point of my CH. 7 filing.  I thought that i read that the derogs can re-appear post DC though?  We shall see i guess.

 

My reports are having more ups and downs than a 6 flags rollercoaster.

Message 16 of 17
Contributor

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7


@Underconstruction wrote:

a new problem has arisen its ugly head, the county says the house is worth about 20k more than what we paid for it.

So the homestead exemption of 5,000 according to a local attorney will not save the home being that the named person wanting to file chapter 7 has no children to up that number to 25k of exemption.

anyone have any input here?

 


 

 

Underconstruction, You have left out tons of important information before anyone can help you. 

What state are you in ? Are you using state or federal exemptions ? Married, single, kids?

Income ?  total debts (not minimums, just the totals) 

 

The federal homestead exemption in 2019 is $25,150 - For get what the county says your home is worth, you will need a CMA, BPO, or appraisal. 

Also - when I went through my bk7, (which is what I assume you want, but youre probably looking at a bk13.) the trustee, took into consideration costs/fees of sale of the home. I had a $23k exemption and 28K of equity, but no creditor would have seen a dime once court fees, and commisisons were paid so they didn't bother with it.  

 

I wont pretend to know every states exemptions, and the benefits/downsides, federal exemptions would be something to look into. 

 

Your attorney should be able to answer all your questions, and should be able to do so within a buisness day. 

Message 17 of 17
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