New Member with Basic Questions

[banannas]

I have read a lot on this site, and it is very informative. My wife and I have been struggling to make ends meet and some help would be greatly appreciated. Here are some basic questions.
1. We have 380,000.00 worth of debt. This includes House (190,000.00) Second Mortgage (90,000.00) and Credit Debt (100,000.00). A lot we know.
We have NOT yet filed and are looking at a 13, do you have to include ALL debt (House) or is it best to do all? and would there be any advantages in leaving any out?
2. We bought our daughter a car and there is around 10,000.00 left on it, we have been making the payments on it, should we see about refinancing it in her name?
3.Would you lose your home in a chapter 7? We do not want to lose our home.
4.Our son goes to private school (were not all that, just public school stink here) would we have to take him out of the school due to costs?
Thanks for the help.

[leftyf]

Welcome. This forum is great. Regarding your questions, here is my 2cents.
1) That's a load. What is your family income? You have to include all of your debts when filing. Is your house worth more than $280K? If you're like a lot of us now, your house might not even be worth that. It may be worth considering selling or walking away from the house. If you have significant equity, it will affect how much of the $100K cc debt you will have to pay back in a 13. FYI, I've been very biased towards the chapter 7 and just received my discharge.
2) Sounds like the car is in your name? I don't think I'd mess with that right now if you're going to file in the next year or so. Could be viewed as preferential transfer and not allowed anyway.
3) Depends on how much equity you have. My guess is, not much. You'll probably be able to keep it...the question will be, do you really want to? It could be too much house payment that caused you to rack up $100K in CC debt. I say this because I was in a very similar situation ($250K mortage(s), $100K debt.) I finally sold my place and had just enough cc limit left to pay the realtors and closing costs.
4) I don't think you'd have to take him out of private school under a 13, but not sure? Have you considered renting an apartment/condo/trailer in a decent public school district?
Of course, as always, please consult with 3 attorneys in your area before deciding what to do. In my experience, most of them will tell you that you will have to file a ch 13. If you decide you may want a 7, keep at it until you find one willing to do it. I think the lawyers like the reliable income stream of a chapter 13.
Good luck.
Lefty

[lrprn]

1. We have 380,000.00 worth of debt. This includes House (190,000.00) Second Mortgage (90,000.00) and Credit Debt (100,000.00). A lot we know.
We have NOT yet filed and are looking at a 13, do you have to include ALL debt (House) or is it best to do all? and would there be any advantages in leaving any out?

First, whether you can file a 7 or a 13 depends on lots of factors - income for the last six months before you file, how your family's financial figures come out on the required means test....you get the picture.

Second - yes, you MUST list ALL debt when you file Ch 7 or Ch 13. You can't pick and choose.

2. We bought our daughter a car and there is around 10,000.00 left on it, we have been making the payments on it, should we see about refinancing it in her name?

As Lefty said, do not transfer this car into your daughter's name before speaking to at least 2-3 bankruptcy lawyers in your area. It may be considered a preferential transfer and prevent you filing bankruptcy for over a year.

If your daughter is under 18, keeping the car as-is won't be a problem if you file Ch 13. Ch 13 trustees typically allow one car for each licensed driver in the family. Now if your daughter is not living with you and is over 18, then things get trickier. You'll need to discuss how your trustee may interpret this situation as you interview bankruptcy lawyers in your area.

3.Would you lose your home in a chapter 7? We do not want to lose our home.

Depends on how much equity you have in your home (the amount you owe compared to the current loan value) and how much equity your state allows filers to exempt. How much equity do you have in your home and which state do you live in?

4.Our son goes to private school (were not all that, just public school stink here) would we have to take him out of the school due to costs?
Thanks for the help.

Whether private school costs are allowed varies from trustee to trustee. The majority do allow it when the need is reasonable and if your son has been in private school long before filing. This is another question to ask during your pre-filing initial consultations with 3-4 experienced bk lawyers in your area.

With the amount of debt you have, it would be best to use an experienced lawyer to file. High debt amount cases always get a closer look by the US trustee no matter what.

Hang in there. Glad you found us! Keep asking questions - we'll help you sort things out as best we can. Your time is best spent now setting up those pre-filing lawyer visits - most are free. You'll learn a great deal about where potential problems areas may be in your case plus what to expect if you do decide to file. Welcome to the forum!

[woeisme]

To answer your question, yes, you must include all debt when you file. You may or may not want to pay your house payments inside your CH 13 though. If you are not behind on payments, then you may be allowed to pay them outside of your plan (we are) which means the trustee won't be charging that extra percentage to the payments, which is beneficial to you. If you are behind on payments, or want to strip part of the second mortgage (only possible I think if you owe more than the house is worth), then the house might have to be included inside the plan payments.

Yo do not necessarily lose your home in a CH 7. It all depends on the equity you have in the house and how much your local exemptions are for housing equity. You do have to meet income requirements for a CH 7 (can't have a lot of disposable income or you'll be forced into a CH 13, especially if your income is above the median for your state).

Some CH 13 trustees allow private school expenses, some do not. It really varies, although if you can document the poor quality of the public school system you would be able to make a stronger argument for it I think. I used to live in Mississippi and there were a lot of private "academies" that were just as terrible as the public school system, (I teach college, and believe me, the kids that graduated from these private schools were just as uneducated as those from the public schools, sometimes worse) so you might need to also prove that your private school is significantly better than the public to justify the expense.

The vehicle for your daughter is something I'd ask a lawyer about before doing anything with it. Is your daughter still living at home as a dependent? That would make a difference because I know in my state I am allowed to have as many cars as there are legal drivers in the household, but if your daughter lives elsewhere, you may be forced to give it up, or at least not count the payments as part of your expenses. It also depends on the equity in the vehicle. If you don't have any equity in it, just owe as much as it's worth, and the daughter makes the payments, it may be a non-issue. But if you have equity in it (say it's worth 15K and you only owe 10K) you may have to pay the 5K worth of equity in it to the trustee to keep it. But definitely don't transfer it to her name right before filing BK if there is any equity involved, it will look like a preferential transfer and the trustee can take the car off of your daughter and sell it to get the equity that was transfered and distribute the proceeds to your creditors.

[woeisme]

Looks like lrprn was writing you an answer at the same time I was, which is why I repeated some of the same things, since I didn't see his/her post until after I posted myself. Nice to see our answers agreed so much, since lrprn is a guru!

[banannas]

Thanks, our meeting is next Tuesday will a bk attorney. Our income is $110,000.00 Yr. Our Daughter is 19 and has her own apartment. Another delima is my wife's father filed a chapter 7, 5 years ago and put his father home ( given to him when he passed) in her name to protect the house from being lost in his chapter 7, what should we do about that? He currently resides there. Oh...... We also have a membership (similar to a timeshare) what would happen to that. Thanks...really..... this has been great!!!

[leftyf]

I really do hate to be negative, honestly. But, I'd say the house is toast. You might as well mortgage it and pay your cc's off. Unless you're in a state with an unlimited or really high exemption, I don't think you'll have much of a choice. Good luck with your attorney.
Lefty

[lrprn]

Our income is $110,000.00 Yr. Our Daughter is 19 and has her own apartment. Another delima is my wife's father filed a chapter 7, 5 years ago and put his father home ( given to him when he passed) in her name to protect the house from being lost in his chapter 7, what should we do about that? He currently resides there. Oh...... We also have a membership (similar to a timeshare) what would happen to that. Thanks...really..... this has been great!!!

You are going to have some sticky issues to deal with if you file bankruptcy.

Right now I can tell you that with the $110K income you have, unless you have more dependents than your one son, it's unlikely you will be able to file Ch 7. It's likely going to be Ch 13 if you file. Again, only an experienced bk lawyer running a means test and schedules can tell you with certainty which bk chapter (7 or 13) you qualify for.

Having two homes, one of which is paid off, could be a big problem if your state doesn't have a generous homestead exemption. Meeting with 3-4 local bankruptcy lawyers familiar with the bankruptcy exemptions in your state will shed some light on what to expect if you want to keep your family home and your father's home as well. If you tell us which state you are living in, we can help you sort this out better.

As far as your daughter's car, since she's not living with you, again everything depends on what your state's vehicle exemptions are and how much all the equity in all of your cars adds up to be. If we know your state and how much equity you have in each of the cars you hope to keep, we can give you thoughts about what might happen there.

As far as your timeshare, there's been quite detailed discussions here in the forum regarding timeshares and how they are treated in bankruptcy. Most trustees see them as a luxury, not a necessity, and expect you to surrender them to free that money up for your creditors. Again, this is a great question to ask during your 3-4 bk lawyer interviews.

Is most of your debt personal or at least half of it business-related? I'm asking because if at least 50% of your debt is business-related, then you don't have to jump the means test hoop. If your debt is at least half business-related, be sure to tell the lawyers you meet with about that.