Quick Answer: Homeowners can potentially keep their house in Chapter 13 bankruptcy by making regular mortgage payments plus a plan payment, but significant home equity may increase required payments. With $200,000 equity and only $100,000 California exemption, this debtor should seek multiple local attorney opinions since payment estimates vary widely from $800-1,500 monthly.
“Dear Steve,
Around $200,000 in home equity. $113,000 in debt thru 12 cards. 50,000 yearly salary. $12,000 in rental income from renting rooms in my house. $2,200 monthly mortgage. $2,500 in cc minimum payments required.
I have talked to several bankruptcy attorneys about filing chapter 13. In California, the equity exemption is $100k for married couples. I could be responsible to pay $200k equity less $100k exemption in chapter 13. Chapter 7 I could lose my home. My latest attorney claims he could get my monthly payments down to $800-$900 for 3-5 years with chapter 13 by lowering the value of my home. I want to believe him, but other attorneys say I could be paying as much as $1500. I have an adult autistic son the attorney says would lower my payments as a dependent. Can I trust this attorney?
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Dear Andy,
The only way you will get a definitive answer is by getting another opinion from another local bankruptcy attorney. Bankruptcy can have subtle local variations so someone with local experience is going to be in the best position to answer the question definitively.
It is my understanding that in order to protect and keep your home in a chapter 13 bankruptcy you’d need to make at least the regular mortgage payment in your bankruptcy, each month. But I’m not sure if you feel a $900 monthly payment is going to take care of everything.
Your situation seems to include a significant amount of credit card debt that might be reduced and then eliminated.
My vote would be to get another opinion before you do anything.
Please post your responses and follow-up messages to me on this in the comments section below.
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