[pbharris4]

Snapple (and anyone else who wants to jump in):

These are VA's state exemptions (as I live in VA)

If I am wrong please correct me. I think I get it now. Since my house is underwater by $100k, I can include the mortgage & HELOC in the CH 7 using the Homestead Exemption. So I can keep the home..IF I make the payments. Should I stop making the payments and they do not modify the loan we can walk away, let them foreclose and not have to pay any $$ or taxes?



Married couples may double the amount of the federal exemptions.
If you choose the second exemption scheme, under Virginia bankruptcy laws, you can generally keep:

• Your home, if you do not have more than $5,000 plus $500 per dependent in equity in the house (today's value less costs of sale less payoff balances on all liens and mortgages)
• One motor vehicle, if you do not have more than $2,000 in equity (today's value less costs of sale less payoff balances on all liens and mortgages)
• Wedding and engagement rings
• Family portraits and heirlooms, up to $5,000 in total value
• The family Bible
• A burial plot and any pre-need funeral contract, up to $5,000 in total value
• Clothes, up to $1,000 in value
• Household furnishings, including beds, dressers, rugs, appliances, sewing machines, pots and pans for cooking, plates and eating utensils, up to $5,000 in total value
• Pets
• Professionally prescribed health aids
• Tools, books and instruments of your trade, including motor vehicles, up to $10,000 in total value
• Farmers' equipment, including a pair of plow animals with gear; a wagon or cart; a tractor, up to $3,000 in value; two plows, one drag, one harvest cradle, one pitchfork, one rake and two iron wedges; fertilizer and fertilizer material, up to $1,000 in value
• Military uniforms, arms and equipment required by law or regulations
• Personal injury and wrongful death causes of action and proceeds
• ERISA-qualified pension benefits, up to $17,500 per year
• Public employee pensions
• Industrial sick benefit insurance
• Group life insurance benefits
• Cooperative life insurance benefits
• Burial society benefits
• Fraternal benefit societies benefits
• AFDC and aid to the blind, aged and disabled
• Crime victims', unemployment and workers' compensation
• Disabled veterans are entitled to a special exemption, up to $2,000
• At least 75% of your earned but unpaid wages

A bankruptcy does not wipe out voluntary liens, like mortgages and deeds of trust, or tax liens. So the lender still has the right to foreclose if you do not pay. If you pay, everyone is happy. Remember, the lender does not want the property; it wants you to pay regularly on the loan. Foreclosure is a last resort for the lender if it concludes it can't get the owed money any other way.


So if the bank forecloses because we stop paying after the CH7 filing we don't have to pay taxes on the house when it sells ay auction or the difference in what we owe and how much it is worth?


BTW, thanks for your help!!!