In Laws Scenario

[keepsmiling]

He needs to understand that he is throwing good money after bad.
The first missed payment is the hardest.
That Heloc situation is going to be intolerable. It's going to need addressing one way or the other. A little planning right now would be a very good idea.
This board is full of people who tried everything including debt consolidation.... and wish they had found this board first. So many retirement dollars that were wasted by being sent to line some bank CEO's pockets instead. PLEASE sit down with him and show him some posts. He needs to get his head out of the sand. None of us wanted to be here....but here we are anyway .

[Pjmax]

Most people who go into debt management programs, regret it, and end up filing BK eventually. Accounts on one's credit report are labeled as in a DMP, and the effect on a credit report or in the eyes of any future creditor is not good. From the size of the inlaws debt, they would be in this for years, and I suspect in the long run won't be able to afford it.

A BK is a business decision. The inlaws need to start looking at reality. If they file BK, it's a clean start over. Even though the public record BK stays on CRs for 10 years, it's not as bad as you would think, since all of the underlying accounts will show a 0 balance. If their scores are good now, there recovery will be faster than those going into it with tons of 'lates.'

Have you tried getting them to come to this forum? Perhaps reading others's stories and asking questions themselves may help them understand their situation. There is no 'stigma' to coming to a forum, and frankly, there isn't much of a stigma anymore, to file BK. Eventually, they may find themselves in a position where they can't pay the minimums, and the phone calls start coming, to them, to relatives, to neighbors, and employers; that is where the real embarrassment starts.

Make sure they consult with more than one attorney before making any commitment. BK consults are usually free, and they need an attorney that's right for them.

[livininma]

It's tough with them because they are very resistant to it. Very proud, of his credit score, of their house. A lot of his debt is from beautifcation to his property. Putting in stone walkways and new siding and new windows and new roof and repointing their fireplace, etc. etc. He isn't what I imagine a typical bankruptcy person is. Credit score still excellent, house in tip-top shape, everything ncie and tidy - except their accounts!!

Tomorrow is our first attorney meeting. His wife isn't going because she "can't take the time from work". I think it's more an issue where she can't deal with it. Quite literally she is unable to talk or hear about it. She just changes the topic. But, if they are going to live with us evnetually, I also want them coming into our home free from stress and worry which they are covered in now, and I don't even know if they realize it, despite telling them.

It would e so much easier if I coul make decisions for them

[Drazil65]

He isn't what I imagine a typical bankruptcy person is. Credit score still excellent, house in tip-top shape, everything ncie and tidy - except their accounts!!


Yeah, that pretty much would describe many of us here who have BTDT!!!! LOL...what DOES a "typical bankruptcy person" look like? That my friend is the big question and if you look in any mirror you will see what the typical bankruptcy person looks like, its all of us. So let them know that, maybe it will open their eyes a little.....

[LadyInTheRed]

He isn't what I imagine a typical bankruptcy person is. Credit score still excellent, house in tip-top shape, everything ncie and tidy - except their accounts!!

And a HELOC ready to make the accounts even worse. Sounds a lot like me before I filed BK.

[AngelinaCat]

He isn't what I imagine a typical bankruptcy person is. Credit score still excellent, house in tip-top shape, everything ncie and tidy - except their accounts!!

We weren't either. We live on a river, on paid for land and house. We had a credit score of 820, better than that of Consumer Advocate, Clark Howard. We both had good incomes and tended to live beyond our means.

But we also had an Enemy that pursued, harassed, cyber-stalked, and cyber-bullied us, and filed endless harassing, frivolous lawsuits against us for NINE YEARS! Plus this Enemy managed to work things so that we lost our jobs.

Add into that mix, prostate cancer for 'Hub, and 4 hurricanes in 2004, and major accidents for both of us in 2007, so here we are......

[livininma]

We weren't either. We live on a river, on paid for land and house. We had a credit score of 820, better than that of Consumer Advocate, Clark Howard. We both had good incomes and tended to live beyond our means.

But we also had an Enemy that pursued, harassed, cyber-stalked, and cyber-bullied us, and filed endless harassing, frivolous lawsuits against us for NINE YEARS! Plus this Enemy managed to work things so that we lost our jobs.

Add into that mix, prostate cancer for 'Hub, and 4 hurricanes in 2004, and major accidents for both of us in 2007, so here we are......

In rereading this, "He isn't what I imagine a typical bankruptcy person is. Credit score still excellent, house in tip-top shape, everything nice and tidy - except their accounts!! ", that came out kind of douchy. Sorry about that.

[AngelinaCat]

I'm just trying to point out that there is no such thing as a "typical bankruptcy person". Each case and circumstance is unique, as are people.

The "typical bankruptcy person" phrase has negative connotations connected to it, i.e, a deadbeat louse that won't pay his bills. Or, alternatively, an irresponsible person that cannot manage his/her affairs.

This stereotypical view is what is playing out in the "theater" of your FIL's mind, and preventing him from making a legitimate business decision to take care of himself and his wife.

Good wishes to all of you!

[livininma]

Well, they went to the attorney and the atty recommended bankruptcy.

One thing I was confused about. Apparently the attorney told them (I wasn't there) that they can go through bankruptcy but keep their primary resident assuming they continue paying the mortgage amount. They are planning on leaving the house in about 1 - 2 years anyway, but it sounded like the attorney was saying that the debt can be discharged but they can still keep living in the house as long as they pay the bills, and then they can eventualy just walk away when they are ready.

Is that true? i thought if the mortgage (HELOC in this case) was discharged (since they are underwater), they would have had to leave the house basically once foreclosure process started.

[LadyInTheRed]

The bank is very unlikely to foreclose if they keep making payments. If the bank does forclose your parents won't have to move until the end of the process, after title has been transferred out of their names.

[livininma]

^But the HELOC debt is still discharged? That would be perfect if that was the case. My worry is that they file for Ch 7 and then somehow because they are still making payments on the HELOC that they assume responsibility for that debt and it bites them later on when decide to leave the house.

As it is, with my MIL working, and the CC debt wiped out, they would be fine living int he house for another year. They are thinking of it as transition period ... not trying to do too much at once you know. BK first. Leave the house later. One step at a time. Once they retire they would need to leave anyway but they will be OK for a little while at least.

[LadyInTheRed]

Yes, if they don't reaffirm the HELOC, their personal responsiblity will be discharged in a Chap 7 even though the lien remains. Making payments on a discharged debt does not reobligate the debtor. That would be a reaffirmation which can only be done by filing a reaffirmation agreement with the court during the BK.