Many bankruptcy petitioners worry about their homes when filing bankruptcy. Whether or not you can keep your mobile home when you file bankruptcy depends on what bankruptcy exemptions are available to you. Is your mobile home considered real estate or personal property? Do you own the land where it is located?
Under Federal Bankruptcy Exemptions a Mobile Home is Protected as a Homestead:
Under federal bankruptcy exemptions, mobile homes are protected as a homestead (up to $150,000) regardless of whether or not you own the land where the mobile home is located, but both Tennessee and Georgia use state exemptions. Some states will allow bankruptcy filers to use the federal bankruptcy exemptions instead of state exemptions, but Tennessee and Georgia do not. If you are a Tennessee or Georgia resident filing bankruptcy, you must use the state exemptions.
Tennessee Bankruptcy Exemptions: Is Your Mobile Home Protected as a Homestead?
In Tennessee, bankruptcy petitioners can exempt up to $5,000 of equity in their home or up to $7,500 for joint owners or up to $25,000 if there is at least one minor child who is a dependent. Tennessee bankruptcy petitioners 62 or older may exempt up to $12,500 of equity in their home, $20,000 if married, or $25,000 if their spouse is also 62 or older.
Georgia Bankruptcy Exemptions: Is Your Mobile Home Protected as a Homestead?
In Georgia, bankruptcy petitioners can exempt $21,500 of value in real estate or personal property (including co-op) used by the petitioner or the petitioner’s dependent as a residence or up to $43,000 if married and only one spouse owns the property.
Knowing How to List Your Mobile Home During Bankruptcy:
So, does this mean you can keep your mobile home when you file bankruptcy? Whether or not you can keep your mobile home during bankruptcy depends on your available bankruptcy exemptions, whether it is considered personal property or real estate, and whether you own the land where the mobile home is located. A mobile home is considered personal property unless you own the land where it sits, but bankruptcy exemptions may still apply.
Converting a Mobile Home from Personal Property to Real Property:
When a mobile home is purchased, a title is issued, and it is considered personal property (not real property). A mobile home can be “converted” from personal property to real property if it is “affixed” to the land, making it a permanent part of the property. Making this change may allow you to qualify for additional exemptions. The conversion to “real property” means the home and the land are considered a single piece of property by law, and a single homestead (a home plus the land it sits on) has advantages when protecting equity during bankruptcy. The legal “definition” of your property will determine what exemptions apply, and you may benefit from advanced bankruptcy planning, so don’t make assumptions and don’t waste time. Talk to an experienced bankruptcy attorney in your local area.
If you are worried about losing your mobile home during bankruptcy, please don’t hesitate to contact our experienced bankruptcy attorneys to discuss your options. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.