Mobile or manufactured housing is handled roughly the same way non-mobile housing is handled in a Chapter 7: it is property that is possibly securing debt the same way a standard mortgage or even car loan does and is likewise property that may be foreclosed upon if payments for the debt that it secures fall behind. The difference is, naturally, in the possibility that this particular type of home may, as its name implies, be mobile.
In a bankruptcy filing, the question for any real estate is whether it does or does not qualify for the homestead exemption available under the Federal Bankruptcy Exemptions and under most state bankruptcy exemptions to varying degrees. For a mobile home as with any home, the question is whether or not the home is the filing debtor’s primary residence. That is, does the debtor actually live in the property at the time the petition is filed? If so, any equity in the mobile home is likely covered by the homestead exemption just as with non-mobile real propety that is the debtor’s primary residence.
A further underlying issue with regard to mobile homes is whether the debtor also owns the underlying land upon which it sits. If so, a certain percentage of this land in combination with the mobile home itself is covered by the homestead exemption. If the underlying land is rented rather than owned, then it is the mobile home alone that is valued and exempted in the bankruptcy petition, while the land must be disclosed on the bankruptcy petition as the subject of an executory rental agreement, much like an apartment. It is important, therefore, to give your attorney all of the information he or she requires to determine your level of ownership in the property so that the various components—mobile home and the underlying land upon which it sits—are both valued properly and in the right amounts and listed properly in the bankruptcy petition.
Further, the manner in which the mobile home is listed in the bankruptcy petition may depend upon such details as whether or not the wheels have been removed from the mobile home. (State law governs this determination, generally).
If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact me at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.
If you have questions about your mobile or non-mobile home and how it might be handled in the bankruptcy process, please contact me at jhilla@aronofflinnell.com or (248) 977-4182 to schedule a free, initial consultation. Together, we’ll work out the best strategy to protect and preserve your home.