Questions on just why my Chapter 13 payment quote was unbelievably high

[IamOld]

And if I may add...aside from the legalities - don't do a separation for this...unless you and husband REALLY are thinking about doing that, such things have a way of snowballing...if yuo want to stay married - don't do it.

If your Dad can lend you guys the money to settle this...then so be it!

[forgotten]

We both want to settle. That I think is the very best way to go. I just hope we can do it. My husband wants to use a company to go through. I want a reliable one. We go to a Consumer Credit Counseling service next week, that is very legit. I am sure they will be able to advise us on this. I mean if we were to offer them 50 cents on the dollar cash immediately to settle the debt, I just wonder if they would like that.

If you stop paying your credit cards after 4-6 months many of the companies start sending settlement offers themselves and are more than happy to discuss settlement options with you. While counseling services may be able to help you settle they take a portion of that in fees so you usually end up paying more than if you did it yourself. If you have 15k cash available immediatley to settle 30k in debt then you should not have a problem doing so. However, don't forget about the tax implications, if you settle the $30k for $15k you will owe taxes on the $15k that was forgiven. You just need to be prepared for a $4000 or so tax bill at the end of the year. Whatever you decide, I wish the best of luck!

[newbie2]

What do you mean, I would'nt be transferring it to anyone, just taking my name of off it. Reading these post I can see where this may really not work. But we do want to settle, so maybe that will work.

By taking your name off of it, you would be giving away your equity in the home and making it solely your husbands.

[Shelly3630]

The question would of course be did the transfer take place at a fair value.

What do you mean, I would'nt be transferring it to anyone, just taking my name of off it. Reading these post I can see where this may really not work. But we do want to settle, so maybe that will work.

[Shelly3630]

We both want to settle. That I think is the very best way to go. I just hope we can do it. My husband wants to use a company to go through. I want a reliable one. We go to a Consumer Credit Counseling service next week, that is very legit. I am sure they will be able to advise us on this. I mean if we were to offer them 50 cents on the dollar cash immediately to settle the debt, I just wonder if they would like that.

[newbie2]

We are thinking about trying to settle though. Both lawyers that I have talked to really seem to like that idea better. I can get 15 grand in a loan from my dad to settle these cases pretty easily. (I will be paying him back 100% by the way.)

There is a reason they both agree that settlement may be better for you -- did you bring up removing your name from your home and separating from your husband to them? I bet they see a nightmare ahead with what you propose to do, and are trying to to keep you from doing what you suggest.

[catleg]

The question would of course be did the transfer take place at a fair value.

[forgotten]

When we filed our petition, we had to answer a question about any property transfers within the last 10 years.

Exactly. The property transfer can be reversed for up to 10 years after the transfer. If they really wanted to wait 10.5 years before they filed then it would probably be okay.

[df04527]

IMO - this type of pre-planning is fraud. You are trying to beat the system. I, personally, could not do it as I prefer to sleep at night.

[catleg]

Remember you'd only owe tax on forgiven principal not the piled-on penalties and interest. That's the good news :-)

[ValleYum]

Remember, too, to check on the tax implications that settling with the cc companies may have for you. It would stink to have a huge tax bill if/when your former creditors send you a 1099 at the end of the year. It is doubtful you could declare yourself insolvent to the IRS with your the equity in your home.

Best wishes.

[momofthree]

When we filed our petition, we had to answer a question about any property transfers within the last 10 years. They can look back further than 2 years. Not to mention, you're talking about basically getting divorced, signing over your home 100% to your hubby, and then living with your parents for 2 years! A separation probably won't cut it, especially since you're talking about signing over your house completely to your dh, and like a pp mentioned, that seems suspicious in itself. Not many people are willing to leave a marriage with nothing. Unless you want to get divorced anyway, I don't recommend this course of action. If you do want to get divorced, then sell the property, pay off your debt, and you'll have a nice chunk of change left in your pocket to start over.

And, yes, as a pp mentioned, your payment will be the same no matter who you go see. You'll be in a 100% plan, so they'll just take your debt, divide by 60, add in attny and trustee fees, and there's your payment.

[catleg]

It might be a fraud upon your creditors if you transfer the house out of your name at this point, but if you do so, and make it 2 years and file BK I don't think the BK court would have anything to say about it. There's a reason these time periods are put into the statutes. The worst case is the creditors file an AP and get the debt declared non dischargeable. There is no bankruptcy fraud in your intent.

More likely the creditors , if the get wind of your property transfer , sue you within the 2 year waiting period and either get a lien on the property or start a fraudulent conveyance action.

But yes, if you have enough property to payoff the debt, and there is no exemption to protect it, the best a ch13 will do for you is turn it into a no interest 3 to 5 year payment plan. Better to settle it the way you discussed if possible.

[forgotten]

Why would it be fraud if my name is not on the property. I would'nt have owned it for at the very least 2 years. I had one lawyer come up with a 700 number payment with both of our incomes, then another come up pretty darn close with just my income. So it was kinda hard for me to really tell whether or not they would base the payment on both incomes. I don't see the real problem if we were to get a legal separation or heck a divorce and I move out for a while. Thats legal. How could they even think about basing the payment on his income if we were legally seperated or divorced. I would have paperwork and documents to prove it. I mean, I'm sure people get divorced and seperated over this very thing every day.

You are attempting to hinder, delay, or defraud your creditors by everything you are proposing. Is it really worth commiting bankruptcy fraud and possible jail time, no matter how much you think you can get away with it? I don't know your states exemptions off hand, but unless you can exempt $200k in equity, which is close to no where except florida, your are going to have to pay back 100% to your unsecured creditors which is why your payment comes out to the same.

If the trustee sees you had a home with $200k in equity 2 years ago you can bet they are going to go digging. Who gets divorced and gives one spouse a $200k home and takes nothing?

[Shelly3630]

We are thinking about trying to settle though. Both lawyers that I have talked to really seem to like that idea better. I can get 15 grand in a loan from my dad to settle these cases pretty easily. (I will be paying him back 100% by the way.)