ok guys... met with BK lawyer...

[tobee43]

Works for me! In GA, they will have you out in 60 days or so.

me too, although we only stayed for 6 months and they headed south.

BK in NJ:
Not paying your mortgage anymore is a good idea. New Jersey is notorious for being one of the slowest states to foreclose. If you can't pay for the house anyway . . . Even if you get judgments, you have nothing they can take, right? CC's usually spend a long time on collection activity before they sue. I didn't get sued for three years! Your credit will already be shot with the CC debt, tax debt, and foreclosure. Use the money to save for an apartment, and use cash to pay your bills, especially your taxes.

I'm a little worried about the taxes, though. You say that you owe 37K in taxes? What kind of taxes? The IRS would always frighten me. I don't know if you can discharge taxes in a BK? You can use the cash to pay your taxes?

Do you have a 401K or an IRA? Can you put some of the cash into that?

What were the large preferential payments?

agreed about the taxes unless they are the dischargable type...like property taxes i wouldn't mess with the IRS. i have heard horror story after story with them, even when the stay is in place they continue to accumulate interest and then make demands that are unreasonable after the stay is lifted and i.e. someone in a chapter 13 has an approved plan, the IRS comes back and says they want MORE. NIGHTMARE!!!!

[BankruptinNJ]

I also read in another thread that the OP has a gambling problem. So sorry! Have you gotten help? Please get professional help by calling the gambling hotline.

I had a manager where I worked who was fired for stealing. He had a chronic gambling problem. He was taken out of the workplace in handcuffs and spent a night in jail. He ended up getting fired from his next two jobs, and was arrested for shoplifting. I have no idea where he is now. It's just a horrible problem but there is help out there! Do not try to go through it alone!

It was my shopping addiction that caused most of my problems. I would get a temporary "high" from shopping.

I can't blame the banks or the credit cards for my financial troubles or for them trying to get the money I owed them (although I do blame them for making it too easy to get credit cards with a high limit, especially for someone who made as little income as I did).

I still struggle with this issue to this day. Addictions are terrible. This is why I have no credit cards (just a debit card), no car, and rent an apartment. I never want to owe money again!

[trader19]

Ok guys... have a new one for you... need some advice. before my income went to crap in a matter of seconds... i also started a horse racing business. it is an LLC with 2 members.... me and my very good friend. this company has operated since jan of 2011. it was/is a serious business. we have been in the RED since the beginning. i have never taken a penny out.... only contributed to it. my friend has financed most of it. he has made loans to the business and we have paid him back with revenue. for instance... he loaned the business 10k to buy a horse... loaned another 5k to pay bills... then the horse wins 11k... he would be re-payed that amount on the loan to the business. keep in mind, this is loan to the business, NOT to me. so i don't think the BUSINESS paying back a loan to him should be considered a preferential payment from me, right? even though outside of the business he would be an insider... but inside the business, he is a creditor to the business. and i have 100% documentation that he loaned this money to the business. so, me going bankrupt shouldn't mean my business is going bankrupt. and the business should be allowed to pays its creditors. is my logic correct?

which brings me to my second point. as of right now... my partner has contributed 24k more to the business than i have. even though our business only has one horse and will be closing up shop quickly... would i be allowed to make a 12k payment into the LLC name and have the business cut him a check for 12k? that way, both partners contributed the same to the business to even out our contributions. we are listed as 50/50 partners on our formation documents. might seem a little shady, but i am wondering what exactly the problem would be? i kinda look at it like this... my 12k payment to the MY business is not an insider payment... and the 12k payment from the business to him is a legitimate repayment of a loan. our balance sheets would now match. opinions?

[btbeme]

Ok guys... have a new one for you... need some advice. before my income went to crap in a matter of seconds... i also started a horse racing business. it is an LLC with 2 members.... me and my very good friend. this company has operated since jan of 2011. it was/is a serious business. we have been in the RED since the beginning. i have never taken a penny out.... only contributed to it. my friend has financed most of it. he has made loans to the business and we have paid him back with revenue. for instance... he loaned the business 10k to buy a horse... loaned another 5k to pay bills... then the horse wins 11k... he would be re-payed that amount on the loan to the business. keep in mind, this is loan to the business, NOT to me. so i don't think the BUSINESS paying back a loan to him should be considered a preferential payment from me, right? even though outside of the business he would be an insider... but inside the business, he is a creditor to the business. and i have 100% documentation that he loaned this money to the business. so, me going bankrupt shouldn't mean my business is going bankrupt. and the business should be allowed to pays its creditors. is my logic correct?

which brings me to my second point. as of right now... my partner has contributed 24k more to the business than i have. even though our business only has one horse and will be closing up shop quickly... would i be allowed to make a 12k payment into the LLC name and have the business cut him a check for 12k? that way, both partners contributed the same to the business to even out our contributions. we are listed as 50/50 partners on our formation documents. might seem a little shady, but i am wondering what exactly the problem would be? i kinda look at it like this... my 12k payment to the MY business is not an insider payment... and the 12k payment from the business to him is a legitimate repayment of a loan. our balance sheets would now match. opinions?

I'd suggest starting a new thread with this if you want it to get attention.

[Guest]

I have a similar situation and live in CT and mortgage is with one of the biggies. 5 months behind (2/3 of a payment in suspense as I've been giving what I could to attempt to equal one payment)...anyone know how backlogged the big banks are and how quickly they might come after me? Ultimately want to get caught up and want to keep my house. BTW, this blog is very helpful in very, very tough times.

[keepmine]

I have a similar situation and live in CT and mortgage is with one of the biggies. 5 months behind (2/3 of a payment in suspense as I've been giving what I could to attempt to equal one payment)...anyone know how backlogged the big banks are and how quickly they might come after me? Ultimately want to get caught up and want to keep my house. BTW, this blog is very helpful in very, very tough times.

What is your endgame? Are you filing bk? If so, which chapter?

[Guest]

Looking like 7...

[hmsmith]

i have made several posts on here and you all have been SOOOOO helpful. i actually look forward to getting this all over with so that i can come back on and pass on my experience to newbies like me.

anyway, met with a lawyer. as some of you who read my posts... my situation is 100k in CC debt... 37k in tax debt....recent large preferential payments... no assets... no equity... and self employed.

his suggestion... wait a year. don't pay CCs anything. let them harass and sue and do whatever. he seems to think that the CCs will spend 6 months trying to get $. then 3 more in a collection... then 3 more in another collection. he said, if they sue... "who cares". so what if they get a judgment... i am not paid on a W2, so there is nothing to garnish. wait the year using nothing but my debit card. don't borrow money... don't pay any back. come back in a year and file chapter 7 to get rid of the debt/judgments.

he also said he would not make any payments on my mortgage. my house is valued at about 460k. i owe 465k. i am already behind 2 payments. he made it seem like it would take up to 3 years to get me out. why not live rent free for 3 years instead of throwing 3500 a month at my mortgage. he made it seem like a calculated risk. worst case... i live in a house rent free 24 to 36 months saving up to $125k in payments before walking away. best case... i live in the house 18/24 months rent free and i get a loan mod or work out a deal with the bank with a sweetheart deal.

he also said if i make some money... i can dump it into my taxes since that would not be a preferential payment and a trustee certainly isn't knocking on the IRS's door asking for the $.

so, does this all seem logical to everyone? any flaws i should know about? also, if i don't pay my mortgage, should i still pay my property taxes?

thanks for any info!!!

It sounds like a good plan, but I'm wondering, if you don't pay that $3500.00 a month to your mortgage, and you save it or pay bills with it, I'm wondering if they would say you have enough money to do a ch 13?

[keepmine]

If you file a 7 and want to keep your home you better figure out a way to get currrent and stay current.
Look at the totality of your situation. Don't try and hangon to something you can't afford.

[TheBajan]

Trader,
Like so many others have said here, it sounds like your lawyer has given you some solid advice. Did you talk to him about your LLC??? If you are closing up shop on it, why not just close it up with the lose and let any proceeds go to your business partner? Simple is always better in my mind and I tend to think the trustee would look at it that way also but that is my opinion (not based on any facts, only perception). Technically, from a legal stand point, it doesn't appear that what you are suggesting is illegal. I just don't see how it's beneficial. It will complicate matters as far as paperwork and could raise red flags to the trustee that you don't want raised even though everything is up and up, he may not see that. I'd run the whole thing by your atty in detail and see what he says about it.

Congrats on your meeting. It sounds like it really set you in a good direction!
The Bajan