First, a caveat: this is directed to Pennsylvania residents. You may also be able to keep lots of stuff in other states, but check with your attorney first. Now let’s get to the good stuff.
Bankruptcy is widely, and wildly, misunderstood. If I had a nickel for everyone who called me and thought they were going to lose their home and car, I’d have, well, a lot of nickels. But the truth is that if you come to Steidl and Steinberg and tell us everything, we will not let you file for bankruptcy if we think there is a chance that the Bankruptcy Court is going to sell your house.
The reason for that is simple: the United States Bankruptcy Code allows you to keep stuff. A lot of stuff. Or at least a lot more stuff than most people think. Ready for some examples?
You can keep about $23,000 in equity in real estate that you live in, double that if the real estate is in both your’s and a spouse’s name. So if your house is worth $150,000, and you owe $105,000 in combined mortgages, do the math: $150,000 minus $105,000 is $45,000. If you are married, you and your spouse can keep $46,000 in equity in this house you live in. Since your equity is $45,000, which is less than $46,000, you can keep your house, as long as you continue to pay for it.
What about vehicles? You and your spouse can keep about $3,500 equity in a vehicle each. If you have a car that is worth $15,000, for example, and you owe $17,000, there is no equity and no problem. If you have a car worth $15,000 and you owe $11,500, there is still no problem. And even if you owe less, and/or your car is worth more, there still may not be a problem, because. . .
You can keep lots of other stuff. You can keep virtually all of your normal household goods. And, for all of your who remember old game shows, you have a “wild card” amount that varies, depending on your other assets, so your wild card may be able to be used for that excess equity in your car, or to hold on to your motorcycle, or maybe to keep your cats or dogs. Just joking. Your cats and dogs are not a problem. And neither is anything else in most cases.
Give Steidl and Steinberg a call. They are attorneys you definitely want to keep.