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    buying a home before filing?

    New here. Hi everyone.

    My wife and I are disabled. I received SSD a couple of months ago. She has not yet gotten hers, but there is little doubt that it will be awarded. Both were appealed.

    Circumstance put us out of our home last year at about this time. We stayed with family until I could manage to get out of there and into a rented home.

    Now I am considering, and have spoken with an attorney about, filing bankruptcy. My debts are about 75K, 25 of it being student loans I took out for my son's education while I was still working. They, of course, cannot be discharged. My savings, retirement, and all tangible assets were lost trying to keep up with medical premiums that were $800+ per month along with deductibles, copays, and living expenses.

    Understand please that my wife has had multiple stokes, suffers from COPD, and has extreme vascular swings between alarmingly high and alarming low blood pressure that sometimes cause her to become incoherent and unable to function. The lower lobe of her right lung was removed because it had become infected with a grapefruit sized abcess. She was hospitalized at that time for more than three months. It then required a rib resection with a drainage tube while she treated with powerful antibiotics. That was in early 2003. She has not been right since and her condition cannot be expected to improve. Subsequent to that she has been hospitalized a few dozens (no joke) of times and we had medical bills in excess of 750K. I have had two heart attacks and serious muskuloskeletal injuries that leave me in constant pain. We were awarded medicaid benefits to retroactively cover most of those medical bills but are still left with the shit end of the stick. I did max out my credit card to try to hold things together, but have not been able to return to gainful employment. I used that borrowed money to keep up with things including the minimum credit card payments. Silly me.

    Any collection letters or phone calls I receive are answered via email, fax, or postal service with instructions not to contact us at any time regarding those or any other debts. Under the Fair Credit Reporting Act creditors are estopped from further collection action short of filing a court claim.

    My SS lump sum payment was $25,000. We can reasonably expect my wife's to be in the low five figures.

    We need housing. My question here is whether I can purchase real estate as our only dwelling with the lump sum awards. If I am credit worthy enough to swing a home purchase (our once perfect credit is long gone now, but I think that kind of money might help to get us into a home) do I run the risk of losing the home if I file bankruptcy shortly after the purchase? I am aware that homes are not fair game in bankruptcy proceedings under ordinary rules, but am concerned that a home purchase at this time and under these circumstances might be out of the ordinary.

    I apologize that I went on about our medical issues. It has been tough and I think they are pertinent to these considerations. And can I please have some thoughts regarding the degree to which a trustee would or must consider those medical issues to discharge any or all of the debt with the exception of the student loans? I do know that there is quite a bit of latitude rendered to trustees in making those determinations, but do some findings of fact compel them to decide arbitrarily in a claimant's favor?
    Last edited by GregS; 05-12-2008, 09:27 PM.

    #2
    You and your wife have had a very tough time of it, GregS. Hopefully it helped a little bit to be able to talk openly about your most difficult family situation.

    Your social security disability income and your wife's when it starts is exempt from seizure and doesn't have to be counted as income on the mandatory Means Test. You're a shoo-in for a Ch 7. However, since you appear to be judgement-free, it's possible to simply stop paying your non-secured bills and let the chips fall where they may because you have nothing of value to take and no income that can be garnished. Did you and your lawyer talk about that possibility?

    Your biggest problem long-term is going to be the ongoing mmedical bills for you both that are going to continue even after filing. You'll have to find a way to continue to pay whatever Medicare doesn't cover.

    Buying real estate in this unstable market and tying up all your liquid cash in a home may not be the best idea right now. It's hard to say not knowing more about your financial situation overall.

    The student loans - can your son take over payment for those?

    I'm glad you found us and welcome to the forums. Keep asking questions - we'll help you sort things out as best we can.
    I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.

    06/01/06 - Filed Ch 13
    06/28/06 - 341 Meeting
    07/18/06 - Confirmation Hearing - not confirmed, 3 objections
    10/05/06 - Hearing to resolve 2 trustee objections
    01/24/07 - Judge dismisses mortgage company objection
    09/27/07 - Confirmed at last!
    06/10/11 - Trustee confirms all payments made
    08/10/11 - DISCHARGED !

    10/02/11 - CASE CLOSED
    Countdown: 60 months paid, 0 months to go

    Comment


      #3
      Thanks IRPM

      Thanks for the reply. To clarify, my son suggested that he might be able to take the student loans. He has been working in his field now for a couple of years and is moving along pretty well with his career. Whether or not he takes the debt or not I will always consider it money well spent.

      I am not planning to seriously look for housing immediately. It could be tomorrow or a few months before my wife gets her award. It is not unreasonable to expect that the mortgage mess will have bottomed out by then, but there are no assurances.

      Are there any other investment vehicles that I can put my money until and unless I make a final decision about a home purchase?

      I have spoken with an attorney. At the time I did not have all the facts straight. I will be talking to him withing the next few days. His first consideration was to negotiate the cc debt, but at that time I was mistaken about the amount and gave him a 10k figure. The student loan issue did not come up.

      Comment


        #4
        When you are in this situation, it's best to set up free/low-cost initial consultations with 3-4 different experienced bankruptcy attorneys in your area. Each will give you their opinions about what's in your best interest to do to get the best overall outcomes for you and your wife. You'll have a much clearer idea of what's going to work best for you after talking with multiple bk lawyers, including if investments are where your financial focus should be right now.

        I hope everything turns out in your favor, GregS. Heaven knows you've had a rough road to follow for awhile now - it's about time you get a break! hang in there - we're here if you have more questions or just need to vent to an understanding bunch of good souls.
        I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.

        06/01/06 - Filed Ch 13
        06/28/06 - 341 Meeting
        07/18/06 - Confirmation Hearing - not confirmed, 3 objections
        10/05/06 - Hearing to resolve 2 trustee objections
        01/24/07 - Judge dismisses mortgage company objection
        09/27/07 - Confirmed at last!
        06/10/11 - Trustee confirms all payments made
        08/10/11 - DISCHARGED !

        10/02/11 - CASE CLOSED
        Countdown: 60 months paid, 0 months to go

        Comment


          #5
          Are the student loans you took out parent loans, one that you are only responsible for, or ones that your son took out and you co-signed for and are now paying on for him?

          I ask because while student loans are typically non-dischargable, there are some exceptions, and you just might be a case where they would make an exception. If the loans are parent loans, and they can't come after your son for the balance, you might look into whether or not you can get a hardship discharge for them.

          Just a thought. Good luck!
          Filed CH 13 September 17, 2007
          Plan Modified July 8, 2009 from $1100/month to $400/month due to change in income, finally discharged in July of 2013!

          Comment

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