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home equity is very high. MA Yes I have an attorney.

Customer Question
Second opinion] <p>home equity...

Second opinion] <p>home equity is very high

Lawyer's Assistant: What state are you in? And are you working with a local attorney?

MA Yes I have an attorney

Lawyer's Assistant: Has anything been filed in civil court? If so, what?

No

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Private school tuition</p>
<p>I need to declare bankruptcy as I have too much debt & interest rates too high. I have a kid in private school for personal reasons. My house is very valuable due to the current housing bubble. I don't want to sell my house. Is it possible for me to declare Chapter 13 at a 100% payback. My income is not high but this might be possible for me to pay.</p>
<p>The homestead exemption is $500,000 where I live. I have some home equity...I'm not sure how much. I REALLY don't want to move (it will not help my financial situation given the rent prices). Now my house is worth 1.14 million dollars. It's a fixer-upper but my neighborhood is insane. The house has many cosmetic issues.</p>
<p>I really must send my child to private school, though I know this sounds like a terrible indulgence. My kid has various issues that are just too much for him in public school. I read that if I pay back 100% of my debt that I can pay the tuition on the private school. It will be difficult to pay the huge amount in 5 years. My income is around median income. But I take it you have to pay in 5 years. You cannot pay in 7 years.</p>

Submitted: 4 months ago.Category: Bankruptcy Law
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Customer reply replied 4 months ago
Ok the basics.
Due to child’s various issues, he needs to be in private school.
I have too much debt at too high an interest rate.
But there are 2 issues with declaring bankruptcy
1) They do not allow private school tuition to my knowledge as an acceptable expense.
2) My home equity is high. I owe $500,000 on my home with a $100,000 second mortgage.However, given my neighborhood gentrifying and the housing bubble my house is worth $1 million or maybe slightly more.In MA where I live there is a homestead exemption of $500,000.I read somewhere there is a 100% payback option that allows you to still pay private tuition.My income is a smidge over median where I live.Thanks
Answered in 17 hours by:
3/15/2018
Bankruptcy Lawyer: Terry L., Attorney replied 4 months ago
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2,961
Experience: Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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private school tuition can be included based on a showing of reasonableness and necessity. Therefore, you may have to explain the necessity to the court/trustee to argue for allowing that expense. Since valuations van vary, you would definitely want to get an appraisal on the home so that you can properly show if there is equity (yes!) and the amount that would be covered by your exemptions. You would calculate the means test analysis (6 month budget test) as well as an equity analysis. Your chapter 13 would pay the higher amount to the unsecured creditors. So, in your fact pattern, you have no equity after exemptions (1M - 600k mortgages - 500k exemption if proper) that would leave $0 to liquidate. Assuming your other assets are covered with the exemptions available, you next move to the chapter 13 means test calculation. 122C-2-Part 1 #20 allows for expense deduction for the monthly amount for education for a physically or mentally challenged child. Would this apply to you? If not, line 43 allows for special circumstance deductions. You would have to prove that this is indeed reasonable and necessary based on your fact pattern, and would be up to the judge to decide if the trustee objects to it. You don't have to go into details on this here, your attorney would be best to advise you on this. Take the means test calculation. Take that figure on line 45, multiply it by 60. The end result of the calculation tells the minimum you need to pay to your unsecured debts.

That being said, you can pay back 100% of the debts and there is no budget analysis beyond whether you can afford that payment or not.
Any further questions?

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Bankruptcy Lawyer: Terry L., Attorney replied 4 months ago

HI. Please click accept to close question and rate my answer if satisfied. If you have more questions, please let me know here and I'll be glad to answer. thanks. Terry

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