Bankruptcy is never a good scenario; however, sometimes, filing for bankruptcy may be the best financial solution for homeowners, especially when they can no longer afford to make their financial commitments.
For homeowners residents within Anne Arundel County and Prince George's County in Maryland, as well as Washington D.C, who are faced with bankruptcy and require a bankruptcy home appraisal, we are the best appraisal company to handle your review.
However, bankruptcy home appraisals typically raise plenty of questions for homeowners. Below we've curated some of the frequently asked questions and provided answers to these questions to equip you with the best information.
What is a bankruptcy appraisal?
A bankruptcy appraisal is a process whereby a licensed appraiser evaluates your property to determine the fair market value of your home.
The appraiser determines the worth of your home after examining several recent local home transactions. The assessment report also contains factual information supporting your home's value.
Why is a bankruptcy appraisal necessary?
There are different reasons why a bankruptcy appraisal is necessary. Usually, whenever individual files for bankruptcy, they are legally required to provide the court with an accounting of all assets and other debts, as well as a synopsis of their current income and debts.
Typically, the place we call home is our most valued material possession hence why a bankruptcy appraisal is necessary.
Similarly, your ability to keep or lose your house depends on the bankruptcy home appraisal report, which is a crucial component of the bankruptcy hearing.
The report determines your home's equity, and this information is crucial during the bankruptcy hearing. You may receive a lower value from the home appraisal report than from nearby realtors or the value in the tax-assessed assessment.
Do I file a chapter 7 or 13 bankruptcy?
By filing for bankruptcy, the goal is to prevent creditors temporarily from foreclosing your home to collect outstanding debts. Although filing a chapter 7 or 13 bankruptcy can help achieve that, they have differences suited to different scenarios.
In a Chapter 7 bankruptcy, the trustee takes the property's equity into account. Your house is exempt from being sold to pay off your debt if it has little or no equity.
However, if the equity is significantly more than the permitted exemptions, your creditor will probably put up your home for sale to settle some of your debt.
On the other hand, although chapter 13 bankruptcy is more expensive, it gives more flexible terms to protect your assets. To safeguard your home, the court demands proof of enough income to cover the nonexempt equity, monthly house payments, and other obligations over three to five years.