Help wih questions

[helpinID]

Well ill try to make this short, but here it is...

Some history, my current wife and I both have had a bad divorce in our past. With this came some unwanted credit issues.

Over the last year and a half I have been rebuilding my credit back up with a car loan and such. It is starting to come back to life. During this time we engaged in a rent to own purchase on a house. This was a good thing for us, due to the housing market shooting up here.

Well the bad....We just found out that one of our sons has cancer....

This has changed things in our life financially drastically. I am taking a ton of time off from work, and my wife quit her job to take care of him full time.

Well we were going to excercise our right to purchase the house, and we were approved for 80% LTV on the house, with no out of pocket expense, and we can even get some money back from the loan...

But, I found out that I have a judgement against me from my ex for $55,000, and now the loan wont go through. With my son sick, we do not have the time or the money to take care of this judgement, and just want to purchase the house to get some money to help us out while I am off of work with his treatments.

Will a chapter 7 fix this for us? We will be able to clean up a lot of things on my wifes credit with this, and some things on mine. I plan on paying off things on my credit report that are in good standings right now.

My ex is in CA and I am in ID.

[HHM]

It is kinda hard to say, if any part of the judgment is for child support or alimony, it can never be discharged in BK. Thus, the answer to your question depends on what, specifically, the judgment is for.

[SinkingFast]

A lot will have to do with what the judgement is for and can you prove it's a false claim. If you can do that, the solution is a simple are writing a letter and providing the appropriate documents.

Sometimes Credit investigators don't get the "Rest of the Story". It could be a simple as there was a query on your Credit. A local Credit investigating office went over to the Court House. Found your divorce filings, saw a claim for $55K, but did not follow the trail to it's conclusion. Maybe you settled this matter as part of the final Divorce Decree/Settlement.

We had a similar thing happen to us. There was a law suit filed, but no Judgement. The Credit Investigator did not do his/her job and follow the paper trail to the end. Poof! we had a Judgement in our Credit Histories. Meanwhile, we'd bought 2 houses, a couple of cars, financed other things. Not one problem. The outa the blue, this bombshell landed in our laps.

If this is a claim for child or spousal support that you were supposed pay, or a debt you agreed to pay as part of the divorce decree, there may not be much to do in this situation.

More information is needed to give you better info.

[helpinID]

The judgement is to my ex wife for the settlement on a house sale. it is not alomony.

We had an original judgment, that I paid half of based off an appraised value of the house. Well the house sold in CA for more than that, and now she sued me for more and I now have a judgement for it.

[HHM]

You'll want to review Section 523(a)(15) of the bankruptcy code. It lays out a fairly broad exception to discharge related to domestic affairs.

to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph 5 (paragraph 5 is the exception to discharge for domestic support obligations) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit

In short, the court order for the property settlement is probably NOT dischargeable in BK. At the very least, the burden will be on you to bring an action, in bankruptcy court, for Determination of Dischargeability. The interesting thing about this, is that in a chapter 13, the above debt would be dischargeable, but in a Chapter 7, it probably will not be dischargeable.

[helpinID]

Well HHM, you are correct. I would have to go with a 13 according to 2 different lawyers here locally. And in three years, I would probably pay $100 a month to my ex for a total of $3600.

When my son went into the hospital a few weeks ago, and we found out his illness we sat down and tried to figure our bills out and how to pay for them all.

My wife used to run a day care out of the house, and she cannot do that anymore, and our son has to be to the DR 3 times a week if he isnt in the hospital getting treatments. So her having any kind of steady work i is really out of the question for at least a year.

We had a plan to pay off debt, have some oh sh*t money in the bank, and prepare for us having to leave to another state for 3-4 months for a bone marrow transplant for him. All of this was with using our house and getting some funds out from refinance. We do not want to, or had not planned on filing for any kind of BK. If we can access the money in our house, we can do this with out it.

But, with the judgement on my record, we cant do this. It appears that our option unfortnately may be filing for a 3 year plan 13, and in 12months if the court says it is ok (and if we can extend our lease/purchase out that long), then buy the house then and put some money back into the bank if approved for a loan again... But that does not help us today, nor does it help us when we need to go out of state either.

we are kind of in a rock and a hard place here...and not quite sure what to do..