I said Chapter 13.. husband said Foreclosure

[mat04]

Well....... we decided to let the second home go on Foreclosure. We stopped mortgage payment. If or when we get the deficiency judgement, we will deal by then... perhaps retire and file chapter 7 or 13.... We saw a lawyer and said he has not seen deficiency judgement enforced for many years... and should not worry about it... I hope he is right, but if not, we will deal with it at that time.

Thanks to all.

[ssdsco]

I have now heard of several folks who have waited to declare a BK 7 (having $200K - $600K in exempt retirement and TDI accounts) until they have retired and are living on their pensions. Pensions and retirement funds are exempt in almost every state, maybe all states for all I know.

I suspect that there are many baby boomers who will eventually opt for this scenario. In addition, I believe there are many folks out there, close to retirement, with health issues, that will eventually qualify for a BK 7 and also qualify to have their student loans forgiven.

The baby boomers are only beginning to show their true un-payable debt to the world. LOL

I see this being discussed in retirement financial planning forums. Looks like there's a bunch of boomers with the only thing between them and early retirement is a chapter 7 and determining how to handle heath care costs. Some are also planning to relo to states with generous BK exemptions and filing chapter 7 after they meet residency requirements.

[ssdsco]

Thanks very much to all of you. WOW!! everyone had said something to think about....
My situation is almost similar to ssdsco... supporting parents (Dad died 4yrs ago), supported my son when he came from Iraq (Military), until he became a Firefighter/Rescue...It is now my daughter's turn to be helped (1.5 more years before Dental school)... we pay for tuition, fees, books, clothes, car, gas, etc... she is taking pre med/chemistry... she plan to take a student loan when she gets to Dental School...

This is what I am thinking: Ch 13 to prevent from deficiency judgement ( appx $100k-$175K)....pay $5,000.00 a month x 10 months (100%payback plan), be tight for 1 year .. then retire a year later.

This is my husband's thinking: Foreclose the house, wait and see how much the deficiency judgement (maybe the bank would not ask for defiency judgement)... retire in 2 years... pay the deficiency judgement from his retirement acct.

We are so confused and dont know what to do. We are gathering papers for ch 13, but everyday our plan changes.

Thanks so much again for everyone who posted, especially to ssdsco and treehugger1, both your ideas are something for me to think about.

Thanks again.

[mat04]

Thanks very much to all of you. WOW!! everyone had said something to think about....
My situation is almost similar to ssdsco... supporting parents (Dad died 4yrs ago), supported my son when he came from Iraq (Military), until he became a Firefighter/Rescue...It is now my daughter's turn to be helped (1.5 more years before Dental school)... we pay for tuition, fees, books, clothes, car, gas, etc... she is taking pre med/chemistry... she plan to take a student loan when she gets to Dental School...

This is what I am thinking: Ch 13 to prevent from deficiency judgement ( appx $100k-$175K)....pay $5,000.00 a month x 10 months (100%payback plan), be tight for 1 year .. then retire a year later.

This is my husband's thinking: Foreclose the house, wait and see how much the deficiency judgement (maybe the bank would not ask for defiency judgement)... retire in 2 years... pay the deficiency judgement from his retirement acct.

We are so confused and dont know what to do. We are gathering papers for ch 13, but everyday our plan changes.

Thanks so much again for everyone who posted, especially to ssdsco and treehugger1, both your ideas are something for me to think about.

Thanks again.

[treehugger1]

I agree with the last comment. While there may not be many of us on this board who make $80+K and over, it is good to hear my direction of continuing to pay into tax-deferred retirement accounts was also first in another's mind. I am in my 50's with a substantial student loan debt. I have not filed for BK, but it has been on the radar for the past 1 - 1.5 years. While i don't know your history, it may be similar to my own. I can "retire" in a couple of years. At that time, my income would certainly be BK 7material. Currently, my income of $85+K is substantial for a single person. I cannot file a chapter seven. I owe about $65K in unsecured debt (not including student loans) and would currently be in close to a 100% BK 13 payback plan. It does not make sense to file for a 13 at this time, when a few years from now I can "retire" and still comfortably pay on my student loans (which are not discharged in BK.)

I have now heard of several folks who have waited to declare a BK 7 (having $200K - $600K in exempt retirement and TDI accounts) until they have retired and are living on their pensions. Pensions and retirement funds are exempt in almost every state, maybe all states for all I know.

I suspect that there are many baby boomers who will eventually opt for this scenario. In addition, I believe there are many folks out there, close to retirement, with health issues, that will eventually qualify for a BK 7 and also qualify to have their student loans forgiven.

The baby boomers are only beginning to show their true un-payable debt to the world. LOL

[ssdsco]

$190K CC debt might come under scrutiny I agree. Especially with a very large income. Did you say you had 200K+? If your lawyer can get you a CH 7 with that income level I want to hire him now.

We are at $116K CC debt and $140K - 150K income, depending on bonuses from year to year. If we could find a way to file CH 7, we would do it.

Note: We were not making that much when we got into debt. DW just finished her doctoral degree and recently started working. We were hoping we could pull things out once she got finished and started working. We were wrong, things were to far gone by then.

[AboutToBK13]

Very few filers will have the problem I do. There's a couple other folks around here that committed "fraud" by giving their kids a down payment for a home.

In this situation the trustee actually goes after the recipients. Rather than have legal action against my daughter and my father's hearing aids repoed I'm waiting the 24 months. I could also settle with the trustee myself.

I'm judgment proof so waiting the 24 months is no big deal. It actually gives me time to convert some non-exempt assets into exempt assets.

I'm also working on collecting enough fines from the collection agencies to pay for my bankruptcy.

Can't wait to see what $190k in CC debt adds up to after a couple years of 33% interest plus fees. My chapter 7 which should be a slam dunk by then may come under a little scrutiny.

$190K CC debt might come under scrutiny I agree. Especially with a very large income. Did you say you had 200K+? If your lawyer can get you a CH 7 with that income level I want to hire him now.

We are at $116K CC debt and $140K - 150K income, depending on bonuses from year to year. If we could find a way to file CH 7, we would do it.

Note: We were not making that much when we got into debt. DW just finished her doctoral degree and recently started working. We were hoping we could pull things out once she got finished and started working. We were wrong, things were to far gone by then.

[ssdsco]

2 year wait. OMG. That is crazy. I really hope things work out for you. Good luck.

I am hoping my BK 13 is not that difficult.

Very few filers will have the problem I do. There's a couple other folks around here that committed "fraud" by giving their kids a down payment for a home.

In this situation the trustee actually goes after the recipients. Rather than have legal action against my daughter and my father's hearing aids repoed I'm waiting the 24 months. I could also settle with the trustee myself.

I'm judgment proof so waiting the 24 months is no big deal. It actually gives me time to convert some non-exempt assets into exempt assets.

I'm also working on collecting enough fines from the collection agencies to pay for my bankruptcy.

Can't wait to see what $190k in CC debt adds up to after a couple years of 33% interest plus fees. My chapter 7 which should be a slam dunk by then may come under a little scrutiny.

[AboutToBK13]

Now I have to wait 2 years from the last support payment to file to have a clean Statement of Financial Affairs.

2 year wait. OMG. That is crazy. I really hope things work out for you. Good luck.

I am hoping my BK 13 is not that difficult.

[FreshLikeADaisy]

Now I have to wait 2 years from the last support payment to file to have a clean Statement of Financial Affairs.

Man, that's harsh, ssdsco. Especially that you were doing the right thing by both your parents and your child, and now you're getting slammed for it, ugh. I wish you a happy wait, if such a thing is possible.

[ssdsco]

Sorry ssdsco, I didn't realize your situation was exactly the same as the OP's. I am not implying that there's fraud or anything extreme in either case, only saying that I understand where they might see these payments/gifts as fraudulent conveyances. The Beemer was a hypothetical obvious example of something the trustee might not view kindly. And the trustee, who gets paid out of what he can recover from your assets and does not love your daughter like you do, may well feel that if supporting her is bankrupting you, then you need to address your own bills first.

If you can afford it, why NOT put your kid through school? As a parent there's really no better place to put your money. And if you can afford it, why NOT make sure they have a decent car and place to live while they're bettering themselves through education? I have no problem with this, personally.

It's just that by the time you get to bk, they want you to have cut every conceivable expense possible before you file, period. I also get the feeling, ssdsco, that your state of residence has a lot to do with it: there is a LOT of old money in NY, as opposed to, say, West Virginia, and the state laws are going to be geared in that direction. While you are not trying to hide assets through your daughter, you would SO not be the first person who tried, and had every justification in the world for doing so.

Just sayin.

No need to apologize ! It's just my dry sense of humor. I thought it was funny you almost nailed the situation which the average BK filer would never get in to.

I saw the OP had a half million dollar plus 2nd home and figured they might be doing the same thing I was with support for their daughter.

Now I have to wait 2 years from the last support payment to file to have a clean Statement of Financial Affairs.

[FreshLikeADaisy]

Sorry ssdsco, I didn't realize your situation was exactly the same as the OP's. I am not implying that there's fraud or anything extreme in either case, only saying that I understand where they might see these payments/gifts as fraudulent conveyances. The Beemer was a hypothetical obvious example of something the trustee might not view kindly. And the trustee, who gets paid out of what he can recover from your assets and does not love your daughter like you do, may well feel that if supporting her is bankrupting you, then you need to address your own bills first.

If you can afford it, why NOT put your kid through school? As a parent there's really no better place to put your money. And if you can afford it, why NOT make sure they have a decent car and place to live while they're bettering themselves through education? I have no problem with this, personally.

It's just that by the time you get to bk, they want you to have cut every conceivable expense possible before you file, period. I also get the feeling, ssdsco, that your state of residence has a lot to do with it: there is a LOT of old money in NY, as opposed to, say, West Virginia, and the state laws are going to be geared in that direction. While you are not trying to hide assets through your daughter, you would SO not be the first person who tried, and had every justification in the world for doing so.

Just sayin.

[ssdsco]

I can understand the "fraudulent conveyance" issue if the $5000 a month goes toward a whole lot more than books and tuition. In other words, if OP is paying tuition directly, and then cuts dd a check for books, food, rent, car, gas and beer money, that could definitely be construed as fraudulent conveyance, especially if the dd's accomodations are fairly luxe. If dd's driving a late model Beemer, for instance, the trustee might not be obliged to see that as a necessary expense. Also, if the parents are literally bankrupting themselves in order to give dd the best of everything (not saying that's the case, but it happens) the trustee might be very inclined to force the parents to turn that around.

I'm going by the OP that said "college expenses" as opposed to "college tuition". Depends on the trustee, though.

[FreshLikeADaisy]

I can understand the "fraudulent conveyance" issue if the $5000 a month goes toward a whole lot more than books and tuition. In other words, if OP is paying tuition directly, and then cuts dd a check for books, food, rent, car, gas and beer money, that could definitely be construed as fraudulent conveyance, especially if the dd's accomodations are fairly luxe. If dd's driving a late model Beemer, for instance, the trustee might not be obliged to see that as a necessary expense. Also, if the parents are literally bankrupting themselves in order to give dd the best of everything (not saying that's the case, but it happens) the trustee might be very inclined to force the parents to turn that around.

I'm going by the OP that said "college expenses" as opposed to "college tuition". Depends on the trustee, though.

[chpxiii]

I believe you but that does surprise me beause educational tuition is an allowable expense on the BK 13 paperwork we are filling out for the lawyer.

Maybe the difference is age of the child and college vs. k-12?

It could also be the state as well?

Now, I'm only guessing here, but maybe the "Educational Tuition" being referenced as an allowable expense is for the *debtor* who is filing, not for the debtor's children.

Someone correct me, please?