Equity in an Asset
Equity is described as the amount of value in an asset above what you currently owe against the loan. If the Fair Market Value of your home is $150,000, and you still owe $100,000 on the mortgage, then there is $50,000 of equity in the real estate that you own. This equity can often be used as a means of securing another loan, or to bargain with when purchasing another home.
But the equity that exists in an asset can become an issue when it is involved in a St. Louis bankruptcy. If the asset you own has a great deal of equity (or at least a great deal more than the federal and state exemptions that are provided to cover it), there is a possibility that the Trustee would be interesting in it. In a St. Louis Chapter 7, the Trustee might wish to liquidate the asset, and use the proceeds to pay towards unsecured creditors. In the alternative, the Chapter 7 Trustee may agree to an arrangement in which you buyout the equity, and make payments over several months. In a St. Louis Chapter 13, the Trustee will not try to liquidate the asset. The Chapter 13 Trustee will simply demand that part of your repayment plan covers the amount of equity that exists in your asset. But an experienced St. Louis bankruptcy attorney can make sure you understand what your options are.
Determining what equity (if any) exists in your assets can be done in several ways. For example, an appraisal may be done to figure out the value of the asset. Regardless of what method is used to make such a determination, it is very important to hire an attorney who knows and understands how and why equity in an asset can affect your ability to keep it. The St. Louis bankruptcy lawyers at The Law Office of Jennifer Alter-Rieken have helped save thousands of assets from being liquidated, while at the same time discharging millions of dollars in debt. Our staff is ready to guide you towards a better financial future, and lead you to the fresh start / clean slate that you deserve.