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Homestead Exemption Question
Thank you. As a practical matter (maybe not a legal one) isnt a Chapter 7
Trustee going to factor in 8% costs of sale in the manner I did below in
deciding whether or not to sell a property? Also, just to be clear, moms
interest is protected by virtue of the over 65/disability exemption of her
spouse, correct ($150k but only $125k allowed under bankruptcy code)?
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No, you don't get to deduct the costs of sale as a legal matter. Equity is
$200,000, not $160,000. Mom's half is protected, daughter's half is subj to
$50k homestead. Consider NOT filing mother until AFTER daughter's case is
over and oppose Trustee sale under 363(h) grounds - hardship in co-owner.
Then file mother's case. I think you have a winner - no guarantees
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
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Facts:
Title to real property is held as follows: Mother and Daughter, as joint
tenants (Father quitclaimed his interest to daughter over 7 years ago).
Both mother and daughter are considering filing Chapter 7 cases. Both
mother and daughter (and father) are living in the home (although Daughter
just moved in recently). Father is over 65 and disabled.
FMV of home=$500,000
Est. costs of sale=$40,000 (8.00%)
Mortgage liens: $300,000
Subtotal-realizable total equity: $160,000
Am I correct in the following:
A. The potential equity to each bankruptcy estate is $80,000 (half of
the $160,000)?
B. Both mother and daughter are entitled to separate homestead
exemptions on their half shares?
C. If yes to "B" above, Mother is entitled under CCP 704.730 to a
$125,000 homestead exemption on her half; and Daughter is entitled to a
$50,000 exemption on her half?
As a related question, given the recentness of the daughter moving into the
home, how problematic is it for her to take an exemption? Can both the
mother and daughter record separate Declarations of Homestead to help as
evidence of intent to reside there?
Thanks for any input,
Mark
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
Toll Free: 1-866-576-6275
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency (see what this means at
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