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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2884
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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i filed chapter 7 pro se on 03/13 (NC). i own a home, lost

Customer Question

i filed chapter 7 pro se on 03/13 (NC). i own a home, lost my job and havent made any payments for approximately 1 year. i listed the value of my home at 220k. lender filed a motion for relief& i filed an objection. the hearing is set for may 7. i am not sure of the actual value of house. (i got 220k based on asking price of a home on the same block built by same builder). i objected to movant's motion based on: 1) value of home; 2) accuracy of payoff amount (179k); 3) motion omitted line item (listed 1-6 then 8,9); 4) i acknowledged/admitted default but denied accuracy of info & amounts listed. i also denied liability for any & all reasonable attorney's fees+validity of any other costs; and 5) i denied movant's claim of inadequate protection. if my income increases enough i would like to reaffirm my mortgage if not then i want the court or trustee to liquidate home, so i can get my homestead exemption.what do i need to bring/do at hearing?
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 8 years ago.
The short answer is that the lender will probably get their motion granted.
Under chapter 7, a home is not necessary for an effective reorganization under chapter 7 (meaning, you do not need a home to file bankruptcy). The judge will hear you out at the motion, but the motion is really just to take the home outside of the bankruptcy. If you are in default, then the judge will normally grant these motions. If you can catch up, refinance, or sell before the foreclosure sale, you'll be fine. Otherwise if you want to walk away from the home, then you can do so too, and don't need to fight this motion. Now, it is a separate matter if the trustee wants to object or not. They usually won't unless there is significant equity to make a reasonable distribution to your unsecured creditors after exemptions and liquidation costs. Since the chapter 7 automatic stay lasts just 90 days during the case, it only buys you a few weeks by fighting this motion anyways. But, to fight it if you choose, you need to bring evidence to support your disputed points, whatever you can show the judge to show them that the lender is not entitled to such relief.
Customer: replied 8 years ago.
if i dont fight and allow the foreclosure to proceed or court rules to lift stay, then what happens to my homestead exemption? excluding any realtor's fees, the equity could be anywhere from 39-59K
Expert:  Terry L. replied 8 years ago.
If the trustee sells your home, you will get a check for the exemption amount at closing. If there is not enough equity to liquidate, then they just allow the foreclosure to continue.
Terry L. and other Bankruptcy Law Specialists are ready to help you
Customer: replied 8 years ago.
i received a call from lenders attorney. the are trying to avoid having the hearing on thursday. they sent me a consent order. here is an excerpt:

The Court having considered the Motion and the record in this case finds and concludes as follows:
1. The Creditor filed the Motion on March 31, 2009.
2. The Clerk of the Bankruptcy Court mailed a Notice to interested parties on April 2,
2009 that any objection to the Motion must be filed with the Court by April 14, 2009 and that if no objections were filed within that time period, then the Court would consider the Motion without a hearing.
3. On April 13, 2009, an Objection to the Motion was filed by the Debtor.
4. Cause exists for modification of the automatic stay afforded by Section 362 of the
Bankruptcy Code.
Motion is granted, and the automatic stay afforded by Section 362 is modified to allow
Countrywide Home Loans Servicing, LP to exercise its state law rights with respect to the Real Property, or in the alternative, to work out a Loan Modification with the Debtors.
IT IS FURTHER ORDERED that Rule 4001(a)(3) of the Federal Rules of Bankruptcy
Procedure is waived and that the Creditor may immediately enforce and implement this Order. IT IS FURTHER ORDERED that if a sale of the Real Property is held and excess proceeds are derived, then such proceeds shall be deposited with the Chapter 7 Trustee in this case.

My understanding is that this will cancel hearing and allow the trustee (provided they agree with order and upon sale of house) to pay lender-- me-- additional creditors. I just want to make sure I'm not signing anything that gives lender authority to proceed with foreclosure and thereby losing my homestead exemption.
Expert:  Terry L. replied 8 years ago.
You will not lose your homestead exemption. This allows the lender to sell the home at foreclosure and give any proceeds to the trustee, if the trustee is interested in liquidating the asset.
Customer: replied 8 years ago.
i believe i understand. thanks for your help.
Expert:  Terry L. replied 8 years ago.
good luck. thanks

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