Bankruptcy Indiana

I'm Mark Zuckerberg, and as I continue to offer Indiana bankruptcy help, I answer questions posed by Indiana bankruptcy blog readers.  Today's question concerns trailers and mobile homes.

Most states have a specific exemption for a debtor's home.  That would include a mobile home or trailer, so long as the individual is living there.  The homestead exemption is a law that protects a person's home from creditors who don't have a lien (mortgage) against the property. In the state of Indiana, the homestead exemption is $15,000 per owner (a couple could have an exemption of $30,000.

I need to add some cautions here about the Indiana bankruptcy help I offer in the blog.  Remember that individual circumstances differ.  Different courts rule differently sometimes, on details such as whether a room is rented out in a home to bring in income to the owner, and how long you have lived in that home.  It's best to have a legal adviser to help you steer through the process of valuing the home in order to qualify for the exemption.

To give you a very general idea of how the bankruptcy court would view a trailer, the calculation would go something like this:

• Take the value of the trailer (most clients haven't the foggiest idea of how to obtain an accurate appraisal).
• Subtract selling costs (were the home to be sold - usually 10% is a valid number).
• Subtract the amounts owed on the mortgage(s).
• The remainder is your equity, against which the exemption will be measured.

Say a mobile home is "worth" (again, you need an expert in valuing property) $80,000. Take away $8,000 in hypothetical selling expenses, leaving $72,000.  The mortgage has a payoff balance of $60,000, so your equity is only $12,000, well within the $15,000 exemption.  Your trailer, then  would be fully protected from creditors.

My point is, when it comes to appraising property values for bankruptcy purposes, it's not about doing the right arithmetic, but about having the correct numbers to begin with!