Use Exemptions In A Bankruptcy Filing To Protect The Family Home

Use Exemptions In A Bankruptcy Filing To Protect The Family Home """Due to the high number of reported foreclosures over the past few years, many Americans are attempting to protect their homes in any way possible. As property values continue to decline, individuals are at a loss for action. Individuals who cannot afford their payment approach their bank with the belief that a loan modification may be the solution they require. The banks' filthy little secret is that only about 5 percent of applications are approved. The government bailed out the banks in 2008 with TARP and in 2009 with QE2, but they are unwilling to spend any of the money it provided them. The last thing most hard-working people want to do is file for bankruptcy, but after exhausting all other options, it is often the only way they can save their home from foreclosure.

The exemption laws of the state in which the home's proprietor resides govern the protection of a home during a bankruptcy filing. Depending on the jurisdiction, most houses would be exempt from bankruptcy protection unless the owner had substantial equity.

Due to the volatility of the real estate market, it is difficult to assign an accurate value to a bankruptcy exemption. In the majority of bankruptcy cases, an approximate estimate of the value is sufficient. From time to time, a bankruptcy trustee contacts a real estate agent or broker with a ridiculous price. This can place the debtor in a position where the trustee sees a non-exempt amount and decides it is in the best interest of the creditors to sell the property and give the debtor cash back equal to the amount of their exemption. The majority of debtors file for bankruptcy to secure their assets and avoid losing them. They do not file for bankruptcy despite the possibility that the trustee will sell the family residence.

This is yet another reason why hiring a bankruptcy attorney is crucial when filing for bankruptcy. A recent court ruling encourages a debtor to list the complete market value in order to trigger a thirty-day deadline for the trustee to object to the amount. If the bankruptcy trustee does not object within 30 days, the debtor will have complete protection against foreclosure.

If, for some inexplicable reason, the trustee files an objection, the court may declare that the property's value exceeds the exemption, and your bankruptcy attorney will have to determine what other exemption to use so that you do not lose anything.

Typically, given the number of individuals filing for bankruptcy today, the trustee will not object in time, or the objection will be denied. The bankruptcy court will reject the objection if the judge agrees that the estimated value of your property falls within the exemption laws.

Nowadays, few individuals have a substantial amount of home equity. In addition, bankruptcy trustees are aware that the real estate market is weak, and that attempting to seize a piece of property in order to sell it and make a few dollars can cost them more in hassles and time than the property is worth. When filing for bankruptcy and attempting to safeguard as many family assets as possible, it is a no-brainer to retain a bankruptcy attorney who will fight for you.

" - https://www.affordablecebu.com/