No. Not unless you want to.
If we file a chapter 7, I can protect up to $30,000 of equity per person on the title under the Utah Homestead Exemption. But, you have to be living in the home and on title for the home. This means that if you are a married couple filing chapter 7, I can usually protect $60,000 of equity in your home.
Remember, equity is the amount of money you’d make if you sold the home and paid off of the mortgage and realtor. It is the money that’s left over.
If you have more than $60,000 of equity, then there’s a good chance that the trustee will want to sell off your home, give you $60,000, and use the rest to pay creditors.
If you file a chapter 13, I can protect the same amount of equity. If you have more than $60,000 of equity, we still don’t lose the home. Let’s say you have $80,000 of equity. I can protect $60,000. With the remaining $20,000 of exposed equity, I take out realtor’s fees of $12,000 (just a guess). This leaves you with $8,000 of exposed equity. We simply propose to pay an extra $8,000 in our chapter 13 over 5 years to protect the equity and pay our creditors a little bit back.
This is not legal advice. If you need legal help, go to www.robertspaynelaw.com.