bankruptcy property exemptions
Can I use the county tax assessed value of my home when filing a Ch 7 bankruptcy in California?
I consulted an attorney re: filing a chap 7 and was told it may not be a good idea based on the value of my home. They used the website Zillow.com to get the estimated value of my property. My property was given a range of $303k to $390k, with a estimate of $349k. This value would put me over the CA equity exemption amount of $75k. Is this a reliable valuation? I am hoping to avoid the trustee questioning the value and forcing me to sell my home to pay off debts. Any suggestions on where to get a value that can be used? County tax assessed value? The assessed value is considerably lower than the value found on Zillow. Appraiser? I don’t have the cash to dish out for an appraisal but would rather be safe than sorry. Also, another attorney said that the value of my home shouldn’t have changed much since I purchased a year ago and that we could use the purchase price. I get the feeling he’s misleading me. Any help would be greatly appreciated. Thanks.
A couple things for you to consider:
1) Sites like realestateabc.com and zillow.com do *NOT* give market values as estimated by an appraiser. These sites spit out comps in the area and give a ballpark estimate of what a home *might* be worth. However, federal regulations dictate that appraisals can only be done by licensed appraisers. Therefore, these sites to *not* give true market values.
2) The county assessor does *NOT* keep record of the market value of a house. They estimate assessed values…which are solely used to estimate the real estate taxes of a property. These values are not market driven. They are usually much lower than the actual market value of the property.
3) Considering that you’re in California, the price that you purchased the property may or may not be a reliable indicator of value. The housing market in California has slowed considerably. I’m not sure which area of California you’re in…some markets have continued to show some minor levels of appreciation; others may have some minor levels of price decreases. An appraiser (not an attorney) in your market would be able to best inform you what the market trends in your area have been like over the past year.
Since you’re going through a Chapter 7, you should discuss these issues with your attorney to decide what would be the best course of action in your case. An appraisal may be in order to determine the current market value of your home.
On a personal note…if I were you, I’d try to avoid filing for bankruptcy at all costs. I went through a bankruptcy 5 years ago and am *still* trying to get my credit back up to par. I’ve kept all my post-bankruptcy lines of credit clean and it has taken this long to get my credit score up to an “average” rating. It’s a huge black mark on your credit and will remain on your credit up to 10 years. I’m not sure what your personal situation is like…but if you’re looking for an easy fix to credit problems, a bankruptcy is not that easy road. If you decide to file, you should do a lot of research so you are fully aware of all the consequences that come with filing bankruptcy (denial of credit applications, outrageously high interest rates, a significant impact on your credit score, etc).
As I said, I’m 5 years post-bankruptcy and I regret my decision to file bankruptcy every single day. All I can do is suck it up and anxiously await the day that it will be removed from my credit reports (another 5 years and counting!)
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Bankruptcy Exemptions: Homestead and Firearm Laws $47.00 When debtors file for bankruptcy protection under Title 11 of the U.S. Code, they may exempt the value of certain property; in many cases, this includes their homestead. In practical terms, to the extent that the property’s value does not exceed the allowed exemption amount, the debtor may keep the property rather than its becoming part of the bankruptcy estate and thereby being available to satis… |
