In such a situation, you should be made aware of the pros and cons of filing bankruptcy, because depending on which chapter you file, you could possibly lose the asset. But then this is why it is so terribly important to seek out a lawyer who has a great deal of experience in handling these types of scenarios. Let me explain what I mean below.
To begin with, when you file a Missouri or Illinois bankruptcy, the court will expect you to disclose all of your assets and property (in other words, you will be required to make it clear what you own, and not withhold information about anything). So you will have to provide a list and description of all real estate in which you have an ownership interest; you will have to list and describe all automobiles in which you have an ownership interest; and you will have to disclose all personal property you own as well, such as furniture, appliances, tv, stereo, bank accounts, etc.
Once this full disclosure is complete, you will then be asked to provide fair market values for each item. For instance, if you own a home, you will need to list what you believe to be the amount of money the house could sell for on the open market. Sometimes this can be done by having an appraisal completed, but that is not necessary. The price at which real estate near your home has sold for is a good indication (assuming the houses that sold nearby are similar in size and complexion). Or if the house needs a lot of work, or if there are many houses in the area that are currently for sale (and none of them have sold in a year). All of these factors can play a role in determining the value of your house.
So let’s say you currently owe $45,000 on the balance of your mortgage loan, and the house is worth $125,000 (in other words, you believe that the house would realistically sell for this amount). The government then gives you a $15,000 homestead exemption to cover any equity, but that would still leave approximately $65,000 in equitable value (45 + 15 = 60; 125 – 60 = 65). In this scenario, a Chapter 7 Trustee would surely want to liquidate your home to get at that equity, and use the proceeds to pay towards your unsecured creditors (like credit cards, medical bills, payday loans, etc.). If the goal is to keep the home, then a St. Louis Chapter 7 bankruptcy is probably not going to be the best choice.
However, if in fact you have a situation in which you own an asset with a great deal of equity (such that the Trustee in a Chapter 7 would likely go after it), you can always file a St. Louis Chapter 13 bankruptcy. This type of bankruptcy is described as a repayment plan over the course of three to five years in which certain debts are paid back. But the most significant factor of filing a Missouri Chapter 13 is that you ensure that your assets (like a house) are kept safe.
The affordable St. Louis bankruptcy attorneys at The Law Office of Jennifer Alter-Rieken have been making sure that our clients receive the best possible outcome for over ten years. All initial consultations are free of charge, so call today!!