Legal Question in Bankruptcy in Maryland

Chapter 13 - equity in home

A client has approx. $100,000 equity in their home, and wants to file a chapter 13 to keep the house, while dealing with a lot of unsecured credit card debt. They are below the median income for the means test and are living on a pension will not have much income left over to support a chapter 13 plan. They would be filing in MD. What are their options?

Asked on 7/30/07, 8:17 am

1 Answer from Attorneys

Daniel Press Chung & Press, P.C.

Re: Chapter 13 - equity in home

If the home is owned as husband and wife by the entireties, only the joint debt has to be satisfied from the equity in the house. If they can pay the joint debt in full over 3-5 years, while paying off the house arrears, a Ch. 13 plan may work. Otherwise, they will need to look at non-bankruptcy options: refinancing to pay off the debt, or a reverse mortgage if they are old enough to qualify; or give up the house.

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Answered on 7/30/07, 2:43 pm

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