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    About to start my journey...

    Hi All,
    Just wanted to say in advance that I appreciate your time and this forum. Its nice to have others to talk to with similar problems..
    So here's my story and some of my questions (i'll try to keep it as brief as possible)
    FYI - I am in the process of seeing lawyers now and will select one in a few weeks.
    I own 5 properties in FL. bought:
    1 condo in 2003, 2 condos in 2004, 2 houses in 2005. None of them except the 2003 condo has any equity. (30-40k) which is also the only one with a conventional loan. The rest are all interest only and either have no equity or severely upside-down.
    All 4 rentals are rented and my net from them combined is: -$820 per month (when they are all rented as currently they are)
    When all is said and done, i operate at a -$1300 per month which includes payment for all credit card minimums, home + eqty loans, and living expenses (my budget is as tight as i could get it as we have been living on a shoe-string budget for over 2 years) The 2 houses have non-escrowed taxes due in November, so when the tax bills come, thats when im in trouble..
    - Own a $5k car in wifes name that is paid off and all properties are in my name.
    - $30k CC debt in my name / $10k in wifes name
    - $100k gift from Dad that i used to buy a rental that I would like to pay back in payments in the future
    - $4k loan from brother

    So far I have stopped paying since Nov my 1st/2nd loan with WF on the rental house from 2005 that im -$820 per month on. I know I will have to either short or foreclose this one as its underwater $110k. This is why I am looking int obankruptcy as I dont want to be stuck with taxable cancellation of debt income

    I am thinking of filing for a Ch7 in my name only.
    Here are some of my questions:
    1. I have 2 checking accts - 1 i use for rental property + my property mtg's/ins/tax/rent deposits/etc / 1 i use for expenses + direct deposit. It is with Wachovia and they both usually have at least 1k in them. Should i close either of them. Should i stop direct deposit and keep it as cash for bills? Should i change banks as Wells Fargo now owns Wachovia.
    2. I have stopped making charges on any credit cards in my name, however, I have recently paid off one of my wife's and her secondary card is set on auto-pay full balance when due. We use this card for all expenses. She also has a 3rd card with an 8k balance that I pay the minimum on.
    Is it ok to payoff her cards in full every month and try to payoff her 8k cc? Not sure if this would be considered fraudulent transfer or not.
    3. I'm expecting an $8k tax refund again this year. I was thinking on using it to pay my $5k primary tax bill. Would it be ok to use the rest to buy a car in my or my wife's name as we only have 1 car at this time.
    4. For the house that I havent been paying mtg on, I am still collecting rent. Should i stop collecting it? If not, is it ok to spend this money on expenses or paying down wife's cc's?
    5. BK may be a long way off as i will time it to conincide with the rental home's foreclosure sale. I'm not sure though if I should stop paying the other rental property mortgages or not, also as to whether I should stop paying credit card payments in my name as all of these debts will be absolved in Ch7. If I did stop on these, I would have too much extra income. Would this be advisable?
    6. If I do start keeping my income as cash and not in the bank, does this mean that I need to keep track of every dime spent? Will the trustee be that scrutinizing?
    7. Is there any way that I can start to pay my brother back without it being a prefential transfer?

    Thx for any questions you may be able to answer in advance..
    -tk

    #2
    Welcome! I hope you find your answers soon, I think that's the hardest part of all of this!

    I can't answer a lot of your questions - but I do know that if you will be filing in the next year you need to avoid payments to your brother. Insider payments have a 1 year look-back. Also, if you are looking to file, why pay off an 8k cc which is dischargeable?
    BKForum Blog: The Journey

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      #3
      Hi Trixie007,
      The 8k CC is in my wifes name and she wont be filing for BK. My thought in paying it off before BK would be so that we start over with no debts after BK (other than to family)

      Comment


        #4
        I just saw your post.

        The lookback period for insider payments (payments to family, or to pay off your spouses credit card) is 12 months. Do NOT make any payments to insiders before the filing for 12 months. You are allowed to pay your family back after your discharge. If you make payments to insiders, the Trustee can go after them to pay the money to the Trustee. See this link:

        http://www.************************/...le-bankruptcy/

        Yes, the Trustee will notice if you suddenly stop making deposits in your accounts and they do want an accounting of every penny you have spent.
        They will also want to know where any proceeds have gone if you sell one of the properties. You have to be very, very careful about selling any asset before bankruptcy. When I filed, I had to provide 10 years of my personal real estate transactions to the Trustee (closing statements, mortgages, etc).

        This is what Bankruptcy Law Network has to say:
        http://www.************************/...oid-losing-it/

        Filed CH 7 9/30/2008
        Discharged Jan 5, 2009! Closed Jan 18, 2009

        I am not an attorney. None of my advice is legal advice in any way..

        Comment

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