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the second mortgage and the February 2004 refinancing ($155,500)
as an “other asset” in his calculation of petitioners’ reasonable
collection potential.
Petitioners presented information to Mr. Owens which showed,
with the exception of $10,000 used to pay creditors from the
February 2004 refinancing, they did not pull any equity out of
the house. Instead, they were only attempting to get lower
interest rates and reduce their monthly payments. For this
reason, Mr. Owens’s determination that the entire amount of the
second mortgage and the February 2004 refinancing was a
dissipation of assets is not supported by the record.14
However, as petitioners concede in their February 28, 2005,
letter, $10,000 of equity was pulled from the home in the
February 2004 refinancing to pay creditors and was thus a
dissipation of assets.
c. Net Realizable Equity in Assets
Taking the above into consideration, the following chart
summarizes the net realizable equity in petitioners’ assets:
14 Respondent cites Mr. Lindley’s testimony that $70,000 of
the May 2001 second mortgage was used to pay credit card debts as
evidence that petitioners were intentionally dissipating assets.
When his testimony is taken in context, it is obvious that Mr.
Lindley was confused as to the details of the second mortgage and
the two refinancings. Mr. Lindley’s confused testimony does not
outweigh the other information indicating that only $10,000 in
equity was pulled from the house.
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