What Is the Asset Value of a Home in Bankruptcy Filing?
In today's devalued housing market, reeling from the crash of mortgage giants like Fanny Mae and Freddy Mac in 2008, homeowners have five facts to consider when determining whether there is any asset value left in their home once they initiate bankruptcy filing.
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Asset or Liability?
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Repairs can exceed asset value The home must have a positive rather than a negative asset value. Repairs, renovations, or demolition costs that exceed the market value of a home make it a negative asset.
Asset or Debt?
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The asset value of your home is subject to how the dice fall. Many homes have flipped to be worth less than the loan. The lending bank or a third party interested in buying the debt would have to agree to adjust their lending rate and accept the Obama subsidy.
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Distressed Sale Value
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A third party may bid an amount to buy the property in foreclosure before bankruptcy filing. To ascertain the distressed sale figure consult with an appraiser or real estate broker in your area.
Investment Value
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Investors search for discounted properties. An investment buyer interested in discounted properties may buy a home before foreclosure and bankruptcy filing. The asset value then becomes the amount that the buyer is willing to pay on a short term basis.
Homestead Exemption
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Equity is determined by debt history. The Bankruptcy Code exemption plan may leave a debtor with equity after the mortgage and other liens are paid. The exemption plan is reduced by the condition of property transfers, crime record, and debt history.
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