Can they do this?

[syn]

My dad is including a business loan into is bk with a certain bank. My parents have an equity loan with the same bank.

To cut to the chase this bank is saying my dad can't include his business loan into his bk because when he signed the loan it stated that if the business can't pay for it then he himself is liable for it.

My parents are trying to make a new payment plan with the equity loan but they (the bank) want to include everything into one payment plan (business loan/equity loan) and are saying in so many words if my dad continues to try and include the business loan then they will screw around or not help them with the equity loan.

I don't see how they can do this, they want $1,500 per month that includes everything that my dad can't afford. I mean my dad is filing bk as himself, why can't he include the loan? What rights do they have to screw around with the equity loan if went and did it?

[fltoo]

Exactly why he CAN include the business loan, he signed for it personally and I am assuming he is filing personal BK?

If they plan to keep the house, I would just advise to keep paying the HE loan and close all other accounts with this institution including any automatic debits.

[syn]

Yes and that's why it didn't make any sense to me. However, what my dad failed to tell me was they want to do like a mortgage where they want to include everything into one thing and not only that put pay off the already existing mortgage my parents have on the house so there would only be one mortgage.

I still don't know if this is a good idea or not.

[fltoo]

In essence, they are asking dad to consolidate the business loan into the mortgage.

Absolutely a bad idea. The loan will be discharged. This bank is trying desperately to recoup this business loan (personally guaranteed) because they know it is going to discharged.

Make sure he does not fall for this scare tactic.

[syn]

Okay so if he told them no deal and did it anyways (adding it into bk) what could they do with the equity loan?

[StartingOver08]

If your Dad is filing personal CH 7 - he needs to include ALL of his personal and business debts. DO NOT CONSOLIDATE any loans with anyone prior to filing.

As to this specific creditor trying to get your Dad to roll the business debt onto his house - no. That is the worst possible move because he is taking an unsecured business LOC and making it secured by his house (HELOC).

Once your Dad actually files (he has not quite filed yet - right?) then he can negotiate which ever loans he wants to keep, if any. It puts your Dad in the drivers seat and the OC knows it - that is why they are trying to scare him/you in to consolidating those two loans.

[dogbone33]

I had a business loan that was discharged... Don't let him fall for the banks crap. He needs to get a lawyer and listen to him/her.

[syn]

If your Dad is filing personal CH 7 - he needs to include ALL of his personal and business debts. DO NOT CONSOLIDATE any loans with anyone prior to filing.

As to this specific creditor trying to get your Dad to roll the business debt onto his house - no. That is the worst possible move because he is taking an unsecured business LOC and making it secured by his house (HELOC).

Once your Dad actually files (he has not quite filed yet - right?) then he can negotiate which ever loans he wants to keep, if any. It puts your Dad in the drivers seat and the OC knows it - that is why they are trying to scare him/you in to consolidating those two loans.

He is filing chapter 13. It probably isn't a good idea but the problem is he is behind on the equity loan and by several months. It makes me think if he doesn't do this they will make him pay up by a certain date or will foreclose. The woman already said he should be in that by now but they won't because of this offer.

I think the bank also got confused on what he's filing, I think they think he is filing bk for the business but it's personal. The other "perks" to this offer is they will pay off the mortgage that is already on the house and pay the house taxes. Cons to it is it's 30 years and $1,500 a month.

[HHM]

Bad idea

[fltoo]

He is filing chapter 13. It probably isn't a good idea but the problem is he is behind on the equity loan and by several months. It makes me think if he doesn't do this they will make him pay up by a certain date or will foreclose. The woman already said he should be in that by now but they won't because of this offer.

I think the bank also got confused on what he's filing, I think they think he is filing bk for the business but it's personal. The other "perks" to this offer is they will pay off the mortgage that is already on the house and pay the house taxes. Cons to it is it's 30 years and $1,500 a month.

Perks? All they are doing is rolling his past due monies, taxes into a new loan with interest.

You really need to to advise him to do NOTHING until he speaks to an attorney.

[syn]

I know what they are doing and I know what their thinking is. I know he can include them as a creditor. In a way he has the upper hand because he can go and add them and they can lose $16,000 BUT what worries me is the equity loan. If it wasn't for that then I wouldn't care what this bank thinks.

So my question really is how can he protect himself against this bank regarding the equity loan if he went ahead with his original bk plan and added them as a creditor?

Forgot to add that he called his lawyer Friday but he was busy with a client so he wasn't able to tell him about the situation. Supposedly he will call back, I will have to inform my dad to call him again Monday if he doesn't hear from him.

[StartingOver08]

The others may correct me, but I thought that the bank had to be added as a creditor anyway- all the creditors have to be listed.

It's your Dad filing the Ch13 right? Not the business? or both?

I am not sure I am understanding your post correctly. If your Dad is filing personally, then all of this debt is taken care of in the plan one way or the other. It sounds like the bank wants it moved to the residence thinking that your Dad will keep his house and let the business go so they want to convert the business loan to personal to make sure it gets paid under the plan.

It makes no sense at all to move that loan to the house. I don't think the bank can force it no matter what they say. Its two different loans (Heloc and business loan) - sounds like they are just trying to pull one over on your Dad.

[syn]

I know that everyone has to be added as a creditor but if he DID do this plan then they wouldn't end up being one. He is filing chapter 13 personal but all of his debts are business related if that makes any sense.

That's what I am thinking, I think that they believe that he is going to lose the business so that is why they say he can't add the loan into his bk but they fail to realize that he is filing as himself so even though the loan will be his problem if the business can't pay for it he is still protected because of the bk.

My worry is I don't know if he has any other option BUT to take this offer on the grounds that he is $4,000 behind on the equity loan. So IF he didn't take their option what will happen between him and the delinquent equity loan?

[keepmine]

He files bk and then, the arreage on the home equity line is included in the plan and, paid off at 100%. Of course, he'll need to stay current on the loan going forward.
Id he upside down in the home to the point that the heloc has no value supporting it? If so, he may be able to strip that lein in the CHapter 13.

[syn]

Well, he is seeing his lawyer on Tuesday, maybe he could include what he is behind on but would the problem arise that both my dad AND my mom are on the loan? My mother isn't filing and there is no way she would include herself in the bk if that was the only way to include the equity loan.

I didn't understand the question you asked me about the value.