Can you file bankruptcy if your house is worth more than you owe?
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Can you file bankruptcy if your house is worth more than you owe?
My mother is 65 and wants to retire. Her job is hard and her health is at risk. Her bills are more than her retirement income would be. She recently saw an attorney who told her her house is worth too much and in this market she couldn’t sell it. Is there anything that she can do?
Asked on January 6, 2011 under Bankruptcy Law, Ohio
Answers:
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 13 years ago | Contributor
I'm not completely sure I understand your question. Did the attorney say she couldn't do Chapter 7 because she would lose her house? That may be true if she has more equity than she can exempt under applicable state law (usually the state where the debtor has resided for the 2 years prior to filing the bankruptcy case). You don't indicate what equity she has in the house or the other necessary information to really address those issues. Her only other option is to do a Chapter 13 case and do a repayment plan. She would need to pay out at least as much as her creditors would get in a Chapter 7 case (again, I can't estimate what that would be since I don't have the information).
She may want to get the advice of another bankruptcy attorney just to be sure. It never hurts to get a second opinion.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 13 years ago | Contributor
I'm not completely sure I understand your question. Did the attorney say she couldn't do Chapter 7 because she would lose her house? That may be true if she has more equity than she can exempt under applicable state law (usually the state where the debtor has resided for the 2 years prior to filing the bankruptcy case). You don't indicate what equity she has in the house or the other necessary information to really address those issues. Her only other option is to do a Chapter 13 case and do a repayment plan. She would need to pay out at least as much as her creditors would get in a Chapter 7 case (again, I can't estimate what that would be since I don't have the information).
She may want to get the advice of another bankruptcy attorney just to be sure. It never hurts to get a second opinion.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
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