Question [Ohio] chapter 7 but homeowner

[13cdelta]

I closed on my home earlier this year. VA home loan for 176k. Well it seemed like one thing after another happened and I used all my savings getting into the house. So I ended up running up personal loans to fix things around my 'new' house. Credit card are maxed out to and was used for fixes. My income is VA disability and SSDI.

Questions:

1. Can I keep my house and 2nd parcel since it has no equity built up? The 2nd parcel of land is where the septic system is and drive way sits on part of it.
2. My understanding is since im 100% disabled from the VA and my income automatically passes the means test in Ohio. So I can discharge?
3. One of my personal loans is secured with my zero turn riding lawn mower, but no serial number attached to loan. Will/can the loan company take my mower?
4. Would I be better off defaulting on my lines of credit and settling them for less money in the future? I'd say it'd take 5 years for me to settle all my debt.
5. My payment history is currently 100% on time; however, only two loans I can not pay right now will be showing up as defaulted in the next month. Would it be better to just let those two loans go and settle them later?

[justbroke]

Welcome to BKForum

I closed on my home earlier this year. VA home loan for 176k. Well it seemed like one thing after another happened and I used all my savings getting into the house. So I ended up running up personal loans to fix things around my 'new' house. Credit card are maxed out to and was used for fixes. My income is VA disability and SSDI.

Congratulations on the new home. The phenomenon which occurs after closing on a home is well known in lending and real estate (agent) circles. New homeowners go out and buy a bunch of stuff to make the new home their home. This is also why most lenders monitor the new homeowner's credit up until closing and are required by some guarantors that the credit is rechecked within the 10-days prior to closing unless monitoring is setup in advance.

1. Can I keep my house and 2nd parcel since it has no equity built up? The 2nd parcel of land is where the septic system is and drive way sits on part of it.

A Chapter 7 doesn't prohibit a debtor from keeping property per se. the question is always going to be the equity and whether or not any equity can be protected. In Florida, we have 100% exemption for homesteaded property. Since you say that there is no equity, then there may be nothing there. I don't know if you can treat it as once parcel since it can't really be subdivided with the way that it's used. I don't know about that.

2. My understanding is since im 100% disabled from the VA and my income automatically passes the means test in Ohio. So I can discharge?

You are exempt from completing the entire means test. You will be able to check the magic box! You still have to complete a portion of the Means Test along with a supplemental form.

3. One of my personal loans is secured with my zero turn riding lawn mower, but no serial number attached to loan. Will/can the loan company take my mower?

If the property has a so-called "purchase money security interest" (or PMSI), then serial number or not, then the loan is secured by that mower. As to whether or not you should reaffirm, surrender, or mark "retain and pay" is a question for your attorney once you figure out your expenses. You really don't want to get out of bankruptcy with a discharge, only to be saddles with thousands of $$$s in (reaffirmed) debt.

4. Would I be better off defaulting on my lines of credit and settling them for less money in the future? I'd say it'd take 5 years for me to settle all my debt.

I don't know. Settlement -- and debt management -- isn't as easy as it looks. How exposed is the home? What if they obtain a judgment lien and attach it to both parcels? Things that you must consider must also includes taxes on any forgiven amount (taxed at your ordinary "earned income" tax rate).

5. My payment history is currently 100% on time; however, only two loans I can not pay right now will be showing up as defaulted in the next month. Would it be better to just let those two loans go and settle them later?

I can't tell you that either. If your are drowning in debt, something has to give. if you intend to file bankruptcy within the next, I don't know, 6 months or so, then paying debt now may be a waste of money. Additionally, the temperament of your creditors will matter. Some creditors go for blood -- read that as a lawsuit and judgment -- rather quickly while others are very slow. There is no way to gauge.