Q: As Chapter 7 filed equity for home exemption + realtor only. Now up $40k if $25k structural repaired. Who pays repairs?
This is Colorado, I'm disabled. At time of Chapter 7 filing there was no equity in home beyond exemption + realtor fees even if home was in shape to sell. Since filing, Zillow shows additional $40k appreciation.
Structural and radon issue fixes would cost $25k. Who pays repairs? Even if home sold 'AS IS' could take over a year to sell. In meantime our mortgage principal is reduced $850 per month, thus building equity. How much time is Trustee allowed to keep home on market before abandoning and allowing case to close, years? Does this affect exemption amount? Are we allowed to stay in home until it sells? How much notice do they have to give us to vacate? If something like a hot water heater goes out, who pays repairs? Seems we are tenants if Trustee owns the home. Are we required to make repairs? After bankruptcy closes we plan to divorce but cannot afford separate households until this clears. Uncomfortable lock down for us both. It's wrong to hope for another market crash, right?
A: The bankruptcy trustee will use the Fair Market Value of the home when deciding whether to list the property for sale. The trustee will send an appraiser to value the home. The appraiser will likely consider the repairs when valuing the home. If the home cannot pass inspection as a result of needed repairs, the trustee may negotiate the price down or find a new buyer. You may continue residing in the home up until the point of sale. If the trustee is unable to find a buyer willing to pay an amount the trustee needs to continue with the sale, the trustee may remove the listing. Ultimately what a home is worth is the amount prospective buyers will pay for it. - not what the trustee thinks it is worth. Given your situation, you should contact an attorney right away to discuss options.
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