Transcript:

Intro Speaker: It’s time for KellyCanHelp hosted by Jeff Kelly, Attorney at Law with the law office of Jeffrey B. Kelly. And now here’s Jeff Kelly.

Jeff Kelly: Hello, this is Jeff Kelly. And in today’s episode, I want to answer the question, is it possible to lose your home in a chapter 7 bankruptcy case? And the answer is yes. You know, this current real estate market is unbelievable. I’ve, I’ve been in practice since 1998. And I’ve never seen anything like it. I’ve never seen a real estate market where somebody in Rome, Georgia can put a house on the market and it sells within a week. So, because of that real estate values have become very problematic for chapter 7 clients. Let me give you an example. Let’s say you have somebody who, you know, 10 years ago, they bought a house for $100,000. And today, the tax assessor says it’s worth 120 Well, that wouldn’t be a problem. In in Georgia, a single person can exempt $21,500, a married couple can exempt $40-43,000. So when when could it become a problem?

Jeff Kelly: Well, for one thing, even though the tax assessor says the house might be worth 120,000, it’s possible that it’s worth more, and a chapter 7 trustee. They are not bound by what the tax assessor says they’re not bound by what Zillow says, you know, honestly, they’re not even bound by what an appraiser says, a chapter 7 trustee has a strong incentive to sell your house if they can make money off of it. That’s, that’s how chapter 7 trustees generate extra income for themselves as by selling assets and paying debts in chapter 7 cases. So they usually work closely with a real estate agent. And that real estate agent has a right to drive by your house, if you’re in the middle of a chapter 7 case. And that agent may look at it and say, Hey, you know what, I know, the tax assessor says it’s worth 120. I think I can get 150 for it. So let’s say, you know, a single person is filing a case under these facts. Well, hypothetically, if that real estate agent puts that house on the market, and sells it for 150, it’s gone. Now the person who filed chapter 7 will get a check for $21,500. Because that’s the amount that we’ve exempted in this hypothetical. So they it’s not like they lose their house and have nothing. But many people who consider chapter 7 say, hey, look, if I, you know, if I wipe out all of my debts, but end up losing my house, and yeah, if I got $21,500 in my bank account, at the end of the day, that’s not a win for me, because I can’t lose this house, I don’t want to lose this house, I love this house. We’ve been here, you know, 10 years, whatever.

Jeff Kelly: You know, if that’s your situation, then you don’t want to file a Chapter 7, you just don’t, because another thing that kind of sneaks up on people that a lot of people just don’t quite get is that if you’re in the middle of a chapter 7 case, and you don’t like the way things are going, you can’t just bail out. You can’t just quit when a chapter 7 trustee has a contract on your house. It’s going going gone. Now, I’ve had a lot of clients asked me before, you know, surely this can’t possibly be real, you know, lose your house in the middle of a chapter 7 bankruptcy ca