Live in MD, have home in NC

[mysticspirit25]

Ok, here is my situation, I live in MD, home I live in is owend by my mom, I have a residence in NC, not rented, was planning on moving, but didnt, so house is just occupied by friends living rent free. Home in NC is worth about 250k, I have an HELOC for 150k (maxed out) and a private mortgage where I borrowed $100,000k from an investor (not a bank), so there is no equity in the property.

I just lost my job in MD, and have about 100k in unsecured debt, I feel that I can file a 7 and keep the house in NC, the interest rate is very cheap, only 5.49 on the HELOC and 5% on private mortgage. The reason there is an HELOC and private mortgage, is I originally paid cash for the home awhile back when I had money. When things got tight, I took out the loans.

I fully intend to keep the home and keep payments up on the loans on the NC home.

How would a trustee look at this, if I filed, it wouldnt be for about 6 months or so, b/c I have been living off credit cards and didnt want any sense of fraud or impropriety.

What does my situation look like? I get 9 months of unemployment and that is enough to cover the loans for the NC home. I live rent free in MD.

My hope is to relocate to the home in NC after all this mess is done and look for a new job.

What do you feel about this? How will the trustee look at the home in NC and the private mortgage?

[Flamingo]

May I ask why you are not now charging your friends rent while they are in your house? That rent could be going to pay on the mortgages on that house. One issue here is that you are living rent free with your mother in her house yet have a house that you own generating no income for you when it probably can, already housing occupants. Your situation is not the way it was then as it is now and you may need to change a few things. You also truly need to figure out if you can actually afford to keep that home. Will that scenario have an effect on you possibly filing bk? I am not certain but I would certainly bring it to the attention of an attorney because right now you are a resident of the State of Maryland with a home in North Carolina and and you will probably need to provide an appraisal and all sorts of things on the house. I would definately consult now with an attorney to find out exactly where you stand on all of this and then plan accordingly. Best of luck to you!

[mysticspirit25]

I am not charging rent b/c my friend who lives in the home is going through a divorce and is my wife's best friend. It is a complicated situation, but I don't think the fact that I "could" be making income on the house has any bearing on what a trustee might think. I just had an appraisal done b/c I wanted to see where I stood on the equity, and the house appraised for 252k, I can exempt the few thousand dollars in equity with my MD wildcard. For all the trustee knows, the home is vacant, I am doing the right thing by actually stating that I own the asset, whereas I could hide it, I've done searches to see if it comes up on the public record searches, and it does not b/c of the way I purchased the home (through a power of attorney), the public record shows my POA as owner (even though I have the warranty deed in my name), and yes, both mortgage companies verified title was in my name, it was just a fluke with the county recorder when I purchased the house originally cash without me actually being there.

I was just trying to get input. I want to go pro se, as I really don't have the money for an attorney, and there are so many helpful sites on filing pro se, I think I could do it.

[mysticspirit25]

BTW I can keep the home b/c my mom said she would buy out my mortgages, and not have to pay her back, but she said she would not help me with my credit card debt. Her reasoning is, why spend the money on unsecured creditors when you can get rid of the debt. She told me to take care of the unsecured debt and then she would lend me the money to buyback the home and payoff the mortgages....but of course, I couldnt do that before filing, b/c then they definatly would take the home b/c it would have 250k in equity.

[Flamingo]

I am not charging rent b/c my friend who lives in the home is going through a divorce and is my wife's best friend. It is a complicated situation, but I don't think the fact that I "could" be making income on the house has any bearing on what a trustee might think. I just had an appraisal done b/c I wanted to see where I stood on the equity, and the house appraised for 252k, I can exempt the few thousand dollars in equity with my MD wildcard. For all the trustee knows, the home is vacant, I am doing the right thing by actually stating that I own the asset, whereas I could hide it, I've done searches to see if it comes up on the public record searches, and it does not b/c of the way I purchased the home (through a power of attorney), the public record shows my POA as owner (even though I have the warranty deed in my name), and yes, both mortgage companies verified title was in my name, it was just a fluke with the county recorder when I purchased the house originally cash without me actually being there.

I was just trying to get input. I want to go pro se, as I really don't have the money for an attorney, and there are so many helpful sites on filing pro se, I think I could do it.

I take interest in your comment that you thought about "hiding" your NC house. If you have a mortgage on the house as you state you do, when you provide records they will want to know what those payments are for. You will have to provide information on checks or other disbursements from your checking account over a certain amount and also explain deposits over a certain amount. Also, if you itemize on your taxes, all sorts of stuff appears on there as to mortgage interest, property taxes, etc. Trustees/courts utilize better search capabilities than Google to check on/verify things and if the Trustee suspects anything, can dig back further into your records over a longer period of time besides six months. Be careful as to your mindset here - being honest is your best bet and no matter what the circumstances, you should be charging those folks rent to live in your house, especially under the circumstances are you are now. I am assuming you don't want them to know so you continue to let them live there rent free. What would you be doing if you were not living rent free with your mother? I see a few other issues also that could pop up with the trustee.

If you are going to do this pro se, you will have a lot going on here and may want to consider otherwise, especially with another property out of state.

Best of luck to you.

[Flamingo]

BTW I can keep the home b/c my mom said she would buy out my mortgages, and not have to pay her back, but she said she would not help me with my credit card debt. Her reasoning is, why spend the money on unsecured creditors when you can get rid of the debt. She told me to take care of the unsecured debt and then she would lend me the money to buyback the home and payoff the mortgages....but of course, I couldnt do that before filing, b/c then they definatly would take the home b/c it would have 250k in equity.

Just saw this after I made my last posting (above). Get a lawyer and best of luck to you!

[TEW]

Just saw this after I made my last posting (above). Get a lawyer and best of luck to you!

Possibly defense and BK lawyer

[mysticspirit25]

To me BK is embarrassing, I don't want to do it, and feel horrible (and I don't want my friends to know, only my wife). But what I feel even more horrilble about is taking my mom up on her offer to give me the money to pay the mortgages outright, and then selling my home to pay back unsecured creditors. Hell, I am not even past due yet, so getting them to settle for 50%, probably wouldnt happen. I guess you are right. I should hire an attorney. If I were to file it probably wouldnt be until mid-09 sometime, b/c I just lost the job, and I do have some savings I have to burn through,(not much, but enough for basic living expenses) so I don't need to jump out and do it tomorrow.

BTW, I have cut up all the cards and thrown them away, even though I have about 20-30k left in charging ability. I don't plan on using them any more.

As far as 'hiding' the asset, yes, I did think about it, but I can't do it. I know they would probably find it, and it just isnt right, it defeats the purpose of the system. The only reason I thought of it, is b/c my ex-wife filed about 9 years ago, hid all kinds of stuff ($50,000 lawsuit settlement, her buyout of my former property we had when we were married, etc.), and got to keep it. Even when somebody reported her and they re-opened her case, she just ignored the paperwork, and after a year, the trustee gave up and closed it again as a no asset (verified this on PACER), and that really pissed me off..but that is neither here nor there.

Just because I thought of hiding assets, doesnt mean I would do it. I know first hand (b/c of my ex) that they can re-open a case...even years after closure if there was fraud.

[hereforinfo]

If your mom is willing to pay off your mortgage and let you live there for free (at least for a while), then it seems as though you should have the means to pay off your unsecured debt once you find a job. Or as Flamingo said, you could be renting out the house in NC for income. If you are on the verge of filing bankruptcy, you are not in the position to provide a rent-free home to a friend, no matter the circumstances or how much you want to. Bankruptcy isn't meant for people who just want to get out of an inconvenient position of debt. It should be a last resort, and IMO it seems as though you have other solutions you just don't want to bother.