Often times in this blog, I discuss what can be done with real estate in a bankruptcy. However, I have yet to provide any indication as to whether a manufactured home or trailer is different from traditional real estate. For the many people who live in trailers, I want to address the significant differences in the laws of manufactured homes compared to those of traditional residences.
Things to Consider When Filing Bankruptcy with a Mobile Home
If you own a trailer, it’s important to know that Arizona laws allow you to protect the same amount of equity in a manufactured home if it is your primary residence. The homestead exemption does not distinguish between real estate and a manufactured home in this regard.
The second thing you should consider is whether or not you have a Certificate of Affixture. If you have such a certificate, your manufactured home will be treated as regular real estate. However, if you don’t have a Certificate of Affixture, the bankruptcy laws are different and the trailer will be treated as personal property instead of real estate.
Modifying your Mortgage
In bankruptcy, it is often beneficial for the manufactured home to be ruled as personal property –this allows you to “cram down” on the mortgage in a Chapter 13 plan. That is, you can force the lender to modify the mortgage and reduce the amount of debt down to the fair market value of the trailer. You can also reduce the mortgage rate down to as low as 4.25%. However, the modified amount must be paid off in full by the end of the Chapter 13 plan.
If you are facing bankruptcy and have questions, come and see me, Benjamin Skinner, an experienced Arizona bankruptcy attorney. Or call (480) 648-8975 today for your FREE bankruptcy consultation.