Lately, land values have been rising causing some real estate to show equity when appraised. This has a direct effect on those wishing to file for bankruptcy relief if the debtor owns real estate that now has equity.
Debtors can only protect so much equity in their land. For example, a single debtor can exempt up to $75,000 in equity to protect his land from being acquired and sold by the court during a bankruptcy. Of course there are more exceptions as to the amount of equity that can be protected (i.e. joint filing of spouses protects $100,000).
While being able to protect the equity in the real estate owned by the debtor, the issue becomes being able to protect other valuable assets too. Debtor(s) have the option of protecting either their real estate’s equity (as described above) or not using the exemption afforded to protecting their real estate and using it to protect personal property (i.e. a boat). The discussion is complex and is too long for a blog post. The main point of this blog is to debtor’s waiting to file and who have rising home values will be placing themselves In a more difficult position to protect their real estate and personal property if waiting to file assuming real estate values continue to rise.
Filing for bankruptcy is a complex process and requires proper planning to determine whether it is best for you. The process entails adherence to strict deadlines and bankruptcy code and procedures along with using proper bankruptcy exemptions to protect their assets. Thus, it is crucial that you select a highly skilled bankruptcy attorney. I make it my goal to provide each client the dedicated time and experience to assist the client with his/her bankruptcy.