Good morning! I just wanted to post and remind people that live can be good, even in a bankruptcy.
For years I struggled with being overextended. My rental properties had taken a massive hit in 2008, when people were losing their jobs. Then insurance hikes, storm damage, etc. This was followed by my wife being diagnosed with cancer: she is in remission now, but even with good insurance the medical bills were high. And almost as an afterthought by Murphy, both of our day jobs cut our pay.
We struggled, we fought. I knew years ago a chapter 13 was needed. But her pride was too much; she would rather lose everything than take the matter into our hands and fix it on our terms. Finally we divorced. At first the divorce settlement seemed unfair: I took on parts of her debt, I kept the rentals that were upside down. But in exchange, she agreed to not set a deadline on refinancing the rentals: as long as the payments were made on time, she would keep her peace.
So once everything was final, I filed a C-13, but under my terms. The real estate was paid outside the plan. The unsecured was at 100%, (pretty much everybody filed a claim) and I had enough money left over to begin paying into my 401(k) again. Everything was looking good.
My mother began experiencing health issues (she’s 80), so she sold off a lot of her long-term riskier investments and moved the money into her irrevocable trust. Then through the trust, she offered to refinance the rentals (same rate and terms.) The trustee agreed, since it would finish up the divorce settlement and get the ex-wife totally out of the picture.
And now, the latest. Last year, Fannie started selling some of the foreclosures near a couple of my rentals at 20 cents on the dollar. A slumlord bought them, and put in Section 8 tenants. The tenants brought the drugs and the pit bulls, and the houses look like a warzone. Their kids are vandalizing the other houses in the neighborhood. My long-term, good tenants in both houses moved out.
The slumlord offered to buy my two rentals at loan payoff. He thought he was getting a steal. But I ran the tax numbers: the two houses had a lot of carryforward Schedule E paper losses for depreciation, plus heldback credits for the restoration work I had done. I checked with my trustee, and he had no problem with me selling them.
So I agreed to sell them but closed one in December, and one in January. The net effect? I can now claim all the carryforward losses of both houses. I’m getting a tax REFUND of $19k this year, and $17k next year (state and federal.) And since I’m in a 100% payback, I get to keep the refund (yes, I double-checked with my attorney and trustee.)
So… I have $19k on the way this spring, some money in retirement savings, a comfortable budget, the remaining rentals are profitable again. And… there is a single woman who lives nearby. She’s about 10 years younger than me, no kids, we go to the same church, and there is some mutual interest…
Life is good!
For years I struggled with being overextended. My rental properties had taken a massive hit in 2008, when people were losing their jobs. Then insurance hikes, storm damage, etc. This was followed by my wife being diagnosed with cancer: she is in remission now, but even with good insurance the medical bills were high. And almost as an afterthought by Murphy, both of our day jobs cut our pay.
We struggled, we fought. I knew years ago a chapter 13 was needed. But her pride was too much; she would rather lose everything than take the matter into our hands and fix it on our terms. Finally we divorced. At first the divorce settlement seemed unfair: I took on parts of her debt, I kept the rentals that were upside down. But in exchange, she agreed to not set a deadline on refinancing the rentals: as long as the payments were made on time, she would keep her peace.
So once everything was final, I filed a C-13, but under my terms. The real estate was paid outside the plan. The unsecured was at 100%, (pretty much everybody filed a claim) and I had enough money left over to begin paying into my 401(k) again. Everything was looking good.
My mother began experiencing health issues (she’s 80), so she sold off a lot of her long-term riskier investments and moved the money into her irrevocable trust. Then through the trust, she offered to refinance the rentals (same rate and terms.) The trustee agreed, since it would finish up the divorce settlement and get the ex-wife totally out of the picture.
And now, the latest. Last year, Fannie started selling some of the foreclosures near a couple of my rentals at 20 cents on the dollar. A slumlord bought them, and put in Section 8 tenants. The tenants brought the drugs and the pit bulls, and the houses look like a warzone. Their kids are vandalizing the other houses in the neighborhood. My long-term, good tenants in both houses moved out.
The slumlord offered to buy my two rentals at loan payoff. He thought he was getting a steal. But I ran the tax numbers: the two houses had a lot of carryforward Schedule E paper losses for depreciation, plus heldback credits for the restoration work I had done. I checked with my trustee, and he had no problem with me selling them.
So I agreed to sell them but closed one in December, and one in January. The net effect? I can now claim all the carryforward losses of both houses. I’m getting a tax REFUND of $19k this year, and $17k next year (state and federal.) And since I’m in a 100% payback, I get to keep the refund (yes, I double-checked with my attorney and trustee.)
So… I have $19k on the way this spring, some money in retirement savings, a comfortable budget, the remaining rentals are profitable again. And… there is a single woman who lives nearby. She’s about 10 years younger than me, no kids, we go to the same church, and there is some mutual interest…
Life is good!
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