Unemployed

[Mehrt]

I'm new here and will have many questions in the future but for now I have a CH 13 question.( Assume I'm not eligible for Ch 7.)

I've had no job for some time now. I originally was looking for a job that would cover all my monthly expenses. Now that I've decided on BK, I've lowered my job search to anything that can pay the rent. I live in SC and can't find anything. I'm in my fifties and that's hurting me.

I know I need a job for CH 13 but what if I can't get one? Are there any exceptions? If I do get something, does it have to be full time. Do I have to have worked there at certain amount of time before I can file?

Thanks.

[Flamingo]

You need income to fund a Chapter 13 (called a "Wage Earner's Plan"). Since you have no income but want to file a Chapter 13, one would assume you have assets you want to protect. If you are truly insolvent and are eligible to file bankruptcy, you would not qualify for a Chapter 13 and would have to file a Chapter 7 where your assets would be liquidated. It would be to your best interests to see a BK attorney in your state to go over all this and I am so sorry as to your job hunting situation - it is tough out there and also tough to keep a current job.

Best of luck to you...

[lrprn]

I'm new here and will have many questions in the future but for now I have a CH 13 question.( Assume I'm not eligible for Ch 7.)I've had no job for some time now.

If "for some time now" is longer than 3-4 months, then unless you have significant income coming in from other sources, you almost certainly qualify for Ch 7.

Are you trying to protect assets (house, car, other property?) by filing Ch 13? If you can share a few more details about your thinking, we can help you sort things out better.

[Mehrt]

Unemployed

If "for some time now" is longer than 3-4 months, then unless you have significant income coming in from other sources, you almost certainly qualify for Ch 7.

Are you trying to protect assets (house, car, other property?) by filing Ch 13? If you can share a few more details about your thinking, we can help you sort things out better.

Thank you both for responding to my question. I have not had a job this year. I have moved from NY to NJ to SC in an effort to find work. I have no real assets except a car (Kelly Blue book $5,000 with $1,200 exemption). If I can get through Ch 7, they can have it. I have $90,000 in unsecured debt.

Here's the problem: In 1998 I bought a home for my aging parents to live in. It was a family idea. My sister is a nurse and lives next door. Other family members agreed to chip in with the upkeep of the home. It was a home run idea until:

My financial situation grew worse over time. I now needed to sell the house and get what equity was left after the housing bust,which, combined with a decent job, could stave off defaulting on my loans for a year or more. By moving I had cut my rent in half. I thought I could do it. I had never ever been late with payments. I wanted to keep it that way.

There was no way I would sell the house with my mother still there so this is what I did:

I sold the house to my brother this past June,who got approved for the mortgage based on a $71,000 gift of equity from me. My sister, who could not get approved, had enough home equity to borrow against and began giving me $3,000 a month to pay my bills back in January. (It took til June to work out the details of selling the house)

Since January my sister has paid me $30,000 and spent $10,000 on repairs to the house that need to be done immediately. The roof and heating system are 35 years old and will need replacing before we can actually sell it.

The house was appraised in June for $356,000. The mortgage is $285,000.
My sister now owns the equity, which is $71,000 minus the $40,000 she has borrowed against with her own home, minus $15,000 estimated cost to replace the roof and heating/AC system. That leaves $16,000. If the home is sold via a broker, there is nothing left.

My two free lawyer consultations both seemed to indicate that the house would be at risk if I filed for Ch 7 despite my being able to prove all of the above.

I don't want my sister to get screwed. Ch 13 seems the safer route but if Ch 7 is possible, I would go that way.

I read where some lawyers push Ch 13 because they get paid more but I don't know how true that is.

I'll go to another lawyer for advise but I was hoping I could get some advice from this forum while I prepare my case.

It's Ok if you can't. It's a difficult situation.

Thanks a million for reading.

[lrprn]

I sold the house to my brother this past June .... My two free lawyer consultations both seemed to indicate that the house would be at risk if I filed for Ch 7 despite my being able to prove all of the above.

Here's where you ran off the bankruptcy road. You can't transfer major assets like this for less than the asset is worth, gift your brother with $75K of equity, and then file bankruptcy within a year - maybe even two - of the transfer. It's likely in this circumstance that your trustee will step in to reverse the sale and sell the house him/herself to pay your creditors instead (and get to keep a tidy % of the sale price for him/herself to boot).

I don't want my sister to get screwed. Ch 13 seems the safer route but if Ch 7 is possible, I would go that way.

At this point with the recent sale of the house to your brother, you may not be able to file either bk chapter without risking the house. (See my previous answer.)

I read where some lawyers push Ch 13 because they get paid more but I don't know how true that is.

Frankly it's a lot less common than you would think reading posts here. The best defense is to study hard and learn how both bk chapters work so you can spot if a lawyer is not knowledgeable or is misleading you.

I'll go to another lawyer for advise...

Given the huge issue of recently selling your house using a '$75K gift' to your brother, you need to meet with at least 2-3 more very knowledgeable bk attorneys in your area. Most have free initial consultations. See if one of the trustees in your local court takes private clients - many do. In this circumstance, having a trustee as your lawyer could be a huge advantage.

Hang in there and find out what's going to be possible and what's not in your difficult and challenging situation. Then make the best decision for yourself and don't look back.

Please remember you have a lot of kindred souls hanging out here who want to help you as much as we can. Hang in there.