Your
House and Car
Depending
upon which exemption scheme is selected and your circumstances,
you may exempt up to $100,000 in equity. When calculating
your equity you should use a value that is based upon
a forced liquidation as opposed to the best selling
conditions to arrive at a value for your home. Once
you know the value, subtract the amount owed plus selling
and transfer costs from the value to calculate the equity.
In the depressed California market, liquidated properties
are often valued less than what we like to think the
property is worth.
Depending
upon which exemption scheme is selected, you make keep
your car if your equity is equal to or less than the
allowed exemption. Generally speaking, depending upon
the exemption scheme selected, you may exempt as little
as $1200 or as much as $9100. When calculating your
equity you should use the Kelly Blue Book or a comparable
guide. Once you know the value, then subtract the amount
owed from the value to calculate the equity.
Generally,
most courts understand that you need a car to work to
get back on your feet. Apply rules of common sense here:
If you own vintage cars which are free and clear and
worth thousands of dollars, you are probably not going
to be able to keep them. If, on the other hand, you
have a car worth $10,000 and you owe $8000 on it, you
will most likely keep it. Again, the need to talk to
a good lawyer should be evident. Most leased vehicles
have no equity and therefore are entirely exempt. If
you owe money on your car or it is leased you must still
make the payments. In those instances you will have
to redeem or reaffirm the property to keep it. However,
in some circumstance your representative can re-negotiate
the loan or the lease to get a more favorable deal for
you.
