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are there any ways to protect home equity


ronn
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Under the new BK rules, 24 months. Any property in the trust is protected, even things like cars, boats, and antiques.

But if all you are trying to do is protect it from a lien placed by a creditor, that's pretty much a done deal as soon as you do it.

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what do you mean by doesnt really matter?

I have approx 100k in equity and was think about 13, since I have 175 in unsecured debt. I will likely lose 50k, since NY exemtion for single is 50k.

Was looking for way to protect the other 50k, like Living trust, Family Limited Partnership, LLC...

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I mean that a Ch 13 doesn't apply the exemption because the whole point of a Ch 13 is to pay back your creditors AND KEEP your assets. If you have too much equity in your home, then Ch 7 is NOT going to work and Ch 13 is on the horizon. Unless you make LESS than the median income you're not going to be allowed to file Ch 7 anyway.

You can read more info on this lawyer's site:

http://www.jamesflexerconsumerlaw.com/bank3.html

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ronn,

If NY State has a $50K exemption it means that $50,000 of your home equity would be exempted. There are also presumption of abuse and other clauses such as median family income limits that would determine would you actually would be paying back. It will not likely be anything like $175K in unsecured debt unless you are a millionaire! Transferrence of property in any way, shape or form over the past couple of years will be highly scrutinized. Generally Trustees will ask how long you've owned your home and whose name it's been in since you've owned it, etc.

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IF you file Ch 7 and actually qualify, then with that much excess equity the Trustee will take your house and sell it to pay creditors.

In a CH 13 you KEEP your property, regardless of equity, that is the reason people in your situation (excess equity) file CH 13 - to keep their property. You do NOT pay the Trustee for the excess equity, you pay your CREDITORs thru the Trustee based on your disposable income. If you can pay at least 25% of your debts over a 5 year period, then you will be in a Ch 13. Secured debts, like a mortgage, must be paid back at 100% meaning your house payments won't change during the Plan, you just keep making your normal payments. The percentage that UNsecured creditors get depends on your disposable income. Disposable income is now determined using the IRS tables for ALLOWED expenses.

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