Have you noticed that the State Equalized Values have not been dropping as fast as the Housing Market? As a general rule, doubling the State Equalized Value or SEV, provides you with the value of your home. If the SEV on your Property Tax bill is $50,000 that means the County believes your home is worth $100,000. Under current Michigan Bankruptcy Law, a married couple can protect only $43,250 in equity in their home in a Chapter 7 Bankruptcy. If your home’s SEV was $50,000 and you had a $50,000 mortgage you would have to pay your creditors, $6,750 in either a Chapter 7 or Chapter 13 Bankruptcy. While no one wants their house value to drop, if you have equity in your home based on the State Equalized Value (SEV) you may still qualify for a Chapter 7 Bankruptcy. Home assessments continue to drop http://www.mlive.com/news/grand-rapids/index.ssf/2011/04/report_most_kent_ottawa_commun.html however, the drops in assessments are not keeping pace with the drops in home values. http://www.brookings.edu/speeches/2011/0413_housing_michigan_katz.aspx Recently a client whose Georgetown Township Home was valued at $240,000 for tax purposes, appraised at $159,000. Similarly a Wyoming home appraised for less than half its SEV value. Armed with the appraisals we were able to obtain discharges under Chapter 7, without impacting our clients home equity. As an added benefit, the appraisal can be used to seek a tax reduction from the County or Township.
