chapter 7 asset case???

[ld2366eh]

Hi,

My mother-in-law is having a hard time paying her bills. (Been there, done that...) She is still current, but won't be by next month. She has about $12,000 in credit card debt split between about 6 different cards. The minimum payments are becoming too much for her.

She also owns a home probably worth about $120K with a HELOC balance around $85K ($90K limit). She's 68 and in PA. She's lived in this house for 46 years. it needs a LOT of work. And the taxes are hard for her to pay every year. I told her she should sell the house, but we are in Illinois and she doesn't want to go through all of that alone.

She says she wants to file bankruptcy. She works part time, and collects Social Security and a small pension.

I'm positive she could qualify for chapter 7, but I think she would probably be an asset case? Is there any benefit for her to file Chapter 7 rather than try to sell the house "as is"? I think all of it is really overwhelming for her.

I would love to hear someone's story if you have any advice or similar situations. I set up a consultation for her for next week (we'll do more later) and I've asked her to call a realtor to get an idea of what she could sell the house for "as is".

Any thoughts would be appreciated.

Thanks!

[TXskyblue]

I don't know the answer to all your questions, but I looked up the IL exemptions on NOLO. She would only have a 15K home exemption according to what I read. Any equity in the house beyond 15K would be an asset.

[ld2366eh]

She's in PA so I think she could use the Federal Exemptions. I think that's around $23K. If she's bent on filing BK, does she keep her HELOC payment current, or stop paying? How does it work if the Trustee declares her an asset case? Does she stay in the house until he sells it? Does she continue to make payments, or no, if it's being sold by the trustee anyway?

[pamkev]

If she plans on keeping the house she should keep current. We used the the Federal exemptions. You should have a realtor come in and see what it would sell for like it had to be sold yesterday and make sure you point out all that needs to be done.

Most of all make sure she talks to at least 3 or 4 lawyers before she makes up her mind.

Pam

[keepsmiling]

She needs to consider where she will live after giving up the house. How much do rentals go for? Will she qualify for low income housing?
Could be a better idea is to take a roommate to help make ends meet. Just a thought.

[AngelinaCat]

Low income housing also tends to have higher levels of crime...

Age 68 today is still young as compared to age 68 of even a generation ago. Would she even consider moving into a Retirement community? There she would have all sort of rules and regulations she would have to live by.

'Hub's ex-wife, also age 68, is living in one, even as we speak. She has a very nice apartment, and it is subsidized housing, but she hates, loathes, and despises living there. Examples of the rules: she can only have two potted plants at her back door, not three. The PowersThatBe let her move in knowing she had two cats and a parakeet. Now they are pressuring her to get rid of the cats. She can only have one car, not two. She would like to get a small scooter, but has nowhere to keep it.

J is busy looking around for a small camper and place to park it. Though on her meager SS, we don't see how she can afford to buy a camper, and pay rent at a trailer park for a lot.

[AngelinaCat]

Hi,

My mother-in-law is having a hard time paying her bills. (Been there, done that...) She is still current, but won't be by next month. She has about $12,000 in credit card debt split between about 6 different cards. The minimum payments are becoming too much for her.

She also owns a home probably worth about $120K with a HELOC balance around $85K ($90K limit). She's 68 and in PA. She's lived in this house for 46 years. it needs a LOT of work. And the taxes are hard for her to pay every year. I told her she should sell the house, but we are in Illinois and she doesn't want to go through all of that alone.

She says she wants to file bankruptcy. She works part time, and collects Social Security and a small pension.

I'm positive she could qualify for chapter 7, but I think she would probably be an asset case? Is there any benefit for her to file Chapter 7 rather than try to sell the house "as is"? I think all of it is really overwhelming for her.

I would love to hear someone's story if you have any advice or similar situations. I set up a consultation for her for next week (we'll do more later) and I've asked her to call a realtor to get an idea of what she could sell the house for "as is".

Any thoughts would be appreciated.

Thanks!

Actually, this sounds a lot like 'J', 'Hub's ex-wife, that I referred to in my post above. 'J' is 68 and lives on a small SS. She is a CNA, but now is unemployable because of her age.

Last September she filed a CH7 to get out from under a mortgage, on a double-wide mobile home and lot. It was far underwater, and it got to where she simply could not make the payments anymore, not to mention property taxes, and maintenance. There may have been a couple of CCs, but I am not sure. She surrendered her home back to Green Leaf Financial (AKA American General)--which has still not been foreclosed on.

Anyway, she filed CH7 in September 2012, and was ruled a No Asset case. She was Discharged and Closed in December 2012.

It was a very simple CH7. Incidentally, she had the same trustee that 'Hub and I did. We filed in 2007.

[AngelinaCat]

Hi Friend. How are you doing?