My dad's dementia, which is the root cause of my parents' bankruptcy, has resulted in a pretty hectic winter for us -- police calls, emergency room visits, and some stressful confrontations. He continues to believe that he should be running affairs and yet spends hours sorting scrap paper by color and size. 
Anyway, he also gets the mail and divides it up in strange ways or hides it or loses it, and he gets the urge to reorganize "his" files, so it's a constant struggle. We're only now nearing having our records in shape for our second attorney consultation, about eight weeks after I had imagined we would.
My mother has now amassed a fair amount of cash in the new bank account she got in her name only so he couldn't have access (he went down to the bank and tried anyway). At one point I thought we needed to make sure we would have that first trustee payment and first 30 days mortgage payments on hand but now I guess I understand that has to come from post-filing income (sorta makes sense), and having cash is just asking for it to be seized by the trustee.
There's another problem, which is that there are four years of taxes to file. Three are refunds totaling max $20K, the last one is going to be a hit of unknown size because my dad was emptying an IRA of $30K to pay credit card debt without telling us (if only we'd known how sick he was, before that), and a messy second lien issue.
Without addressing exemptions and such, we're starting to wonder what our strategy should be. We have rental property we're keeping (I say we, but I'm only in the household, not on the BK), and it needs some significant repairs if we're to keep them occupied and generating income for the BK. I understand that household repairs and appliance upgrades are often recommended and that is certainly one thing we can do. (My mom has suffered with no dishwasher and a 1960s washer/dryer for the longest time. Dad was paying $20K a year to credit cards, that's why!) A pickup for the rental property business would be helpful to me. The property quite justifiably needs everything from carpets to gutters to basement dehumidifiers. Oh, and because of Dad's mortality -- a fair chance he'll die inside of 5 years -- I want to pay back his life insurance policy loan(s).
We still have so much to do including property appraisals and the potential of seeking loan mods. It's just possible (within a few thou) that my parents' homestead would qualify if the new cramdown law passes, but it's borderline, and it's not really a motivation for waiting, I don't think. And none of the rental mortgages are small enough to be crammed down and paid off in the plan. Nevertheless I would like to seek loan mods and sort out a complicated 2nd lien issue (probably for a separate post by itself, that one).
Should we push into BK as quickly as we can at this point? We haven't paid any of the rental mortgages since December and one of them has hit us with a "consideration of default" letter. Well, we thought we'd have filed by now. This would mean using that cash for some of the stuff listed above.
On the other hand, if we wait, we can get the 3 years' tax refunds and use that for the wish list. But we would need to be paying the mortgages again (if they let us at this point), to stretch out our filing date until orderly. Another reason to wait is that I still haven't completely untangled his credit cards and automatic payments, so there are some 90-day rule considerations. (Personally, my POV is that it's due to his dementia and they shouldn't treat it as intentional, but I have no idea if that would fly in court.) I can happily stumble along if this would work. It would give us time to get tenants, too.
I guess I'm mainly worried that if we file first we won't get to keep enough of the tax refunds. Or is it possible to keep them if we have a good reason (e.g. "new fire panel for multifamily dwelling") for every dollar we intend to keep?
On the other hand the sooner we can file the sooner we can get the money, mail, etc. away from my dad's fingers. Legally, we have POA, of course, but not a guardianship yet and he's just always full of schemes (the four hours of the day that he's awake, that is). I wish we could stick to strictly deciding by the numbers but this is a key factor.
So, the options:
1. File quickly, use cash for wish list, beg to be allowed use of refunds, hope for loan mods in BK
2. Restart mortgage payments w/ cash on hand, file for tax refunds, use them for wish list, seek loan mods and then file BK in orderly fashion.
Thoughts? How much cash or emergency funds would a rental business normally be allowed to hold? What am I not thinking of here? What would you do?
Anyway, he also gets the mail and divides it up in strange ways or hides it or loses it, and he gets the urge to reorganize "his" files, so it's a constant struggle. We're only now nearing having our records in shape for our second attorney consultation, about eight weeks after I had imagined we would.
My mother has now amassed a fair amount of cash in the new bank account she got in her name only so he couldn't have access (he went down to the bank and tried anyway). At one point I thought we needed to make sure we would have that first trustee payment and first 30 days mortgage payments on hand but now I guess I understand that has to come from post-filing income (sorta makes sense), and having cash is just asking for it to be seized by the trustee.
There's another problem, which is that there are four years of taxes to file. Three are refunds totaling max $20K, the last one is going to be a hit of unknown size because my dad was emptying an IRA of $30K to pay credit card debt without telling us (if only we'd known how sick he was, before that), and a messy second lien issue.
Without addressing exemptions and such, we're starting to wonder what our strategy should be. We have rental property we're keeping (I say we, but I'm only in the household, not on the BK), and it needs some significant repairs if we're to keep them occupied and generating income for the BK. I understand that household repairs and appliance upgrades are often recommended and that is certainly one thing we can do. (My mom has suffered with no dishwasher and a 1960s washer/dryer for the longest time. Dad was paying $20K a year to credit cards, that's why!) A pickup for the rental property business would be helpful to me. The property quite justifiably needs everything from carpets to gutters to basement dehumidifiers. Oh, and because of Dad's mortality -- a fair chance he'll die inside of 5 years -- I want to pay back his life insurance policy loan(s).
We still have so much to do including property appraisals and the potential of seeking loan mods. It's just possible (within a few thou) that my parents' homestead would qualify if the new cramdown law passes, but it's borderline, and it's not really a motivation for waiting, I don't think. And none of the rental mortgages are small enough to be crammed down and paid off in the plan. Nevertheless I would like to seek loan mods and sort out a complicated 2nd lien issue (probably for a separate post by itself, that one).
Should we push into BK as quickly as we can at this point? We haven't paid any of the rental mortgages since December and one of them has hit us with a "consideration of default" letter. Well, we thought we'd have filed by now. This would mean using that cash for some of the stuff listed above.
On the other hand, if we wait, we can get the 3 years' tax refunds and use that for the wish list. But we would need to be paying the mortgages again (if they let us at this point), to stretch out our filing date until orderly. Another reason to wait is that I still haven't completely untangled his credit cards and automatic payments, so there are some 90-day rule considerations. (Personally, my POV is that it's due to his dementia and they shouldn't treat it as intentional, but I have no idea if that would fly in court.) I can happily stumble along if this would work. It would give us time to get tenants, too.
I guess I'm mainly worried that if we file first we won't get to keep enough of the tax refunds. Or is it possible to keep them if we have a good reason (e.g. "new fire panel for multifamily dwelling") for every dollar we intend to keep?
On the other hand the sooner we can file the sooner we can get the money, mail, etc. away from my dad's fingers. Legally, we have POA, of course, but not a guardianship yet and he's just always full of schemes (the four hours of the day that he's awake, that is). I wish we could stick to strictly deciding by the numbers but this is a key factor.
So, the options:
1. File quickly, use cash for wish list, beg to be allowed use of refunds, hope for loan mods in BK
2. Restart mortgage payments w/ cash on hand, file for tax refunds, use them for wish list, seek loan mods and then file BK in orderly fashion.
Thoughts? How much cash or emergency funds would a rental business normally be allowed to hold? What am I not thinking of here? What would you do?
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