Home Equaity Loans Before Bankruptcy

[hybenamon]

Folks,

I will be honest. My parents loaned me the money to by a car last Spring. It was to their benefit as CDs are not paying much and I offered 5%. But My wife and I don't want my parents stuck as one of my creditors or even to know I am taking Chapter 13. They are elderly and deserve peace of mind. So I am determined to get them out from under the car before I declare Chapter 13. I checked with the bank on a car loan, but they said I had to much debit to income for the risk. But they are offering home equaity loans with zero costs. I am pretty sure I have enough ($12,000) to pay my parents off.

How would this effect my bankruptcy? I don't care actually if they take the car. I just wonder how it will effect my monthly payments under Chapter 13?

Any advise, etc. would be greatly appreciated.

Best HyBenAmon

[HRx]

Folks,

I will be honest. My parents loaned me the money to by a car last Spring. It was to their benefit as CDs are not paying much and I offered 5%. But My wife and I don't want my parents stuck as one of my creditors or even to know I am taking Chapter 13. They are elderly and deserve peace of mind. So I am determined to get them out from under the car before I declare Chapter 13. I checked with the bank on a car loan, but they said I had to much debit to income for the risk. But they are offering home equaity loans with zero costs. I am pretty sure I have enough ($12,000) to pay my parents off.

How would this effect my bankruptcy? I don't care actually if they take the car. I just wonder how it will effect my monthly payments under Chapter 13?

Any advise, etc. would be greatly appreciated.

Best HyBenAmon

Take out the Home Equity Loan, and postpone filing for Chp 13 for 6 months. If filing Chp 13 ASAP is critical for you, then wait 3 months. But waiting 6 months will enable the BK rules to be more to your advantage.

Good Luck!

[hybenamon]

Todd,

Thanks for the info. I really appreciate it. The bank said no on the equity loan because of debit ratio and I didn't think it was wise to tell them it would be reduced as I am taking Chapter 13.

I know you may not answer this question but what is the worst that can happen if I don't declare the car. Do the trusties do that big of search about assets, etc. It would in fact be to my negative not to declare the car because I would have $300 dollars more as excess income.

And no, I have decided not to wait. I want it over one way or another. I have made up my mind if the trustie sets the monthly payment to high I will just let the credit card companies come after me. They can't touch my income (it is retirement) and only 25% of my wife. They can all get in line. With Chapter 13 your credit is shot anyway basically for ten years. Then later I will declare BK after taking care of the car.

I will have according to rough figures with the car if I declare it a total of about 17 to 18 thousand in assets (cars, household and home equity). My state allows $7,500 for each of us (wife and myself). So I will be over about $3,000 dollars.

Again, thanks for the help. It is greatly apprecated.

BTW, I found one good item. I was worried about not having a charge card or credit card when traveling, etc. You can't hold a hotel or rent a car without one. But I found out that that the MasterCard logo bank cards are just about as good as long as you have the funds. I had to go to funeral a good distance away and the gas pumps took it just like my old AMEX card.

Best HybenAmon

[TheMortgageLady]

If you have enough equity in your home, perhaps you could refinance the first mortgage and get cash out to pay off the care. It might be able to keep your debt to income ratios low enough (under 50%) since it would be amortized over 30 years. Of course, this will all be dependent upon how much equity you have in the home, your credit score, etc. Let me know if you have any other questions or if I can help in any other way. Take care.

[rrockinggramma]

car

you must list the vehicle as it is a debt that you have. If you don't and the trustee finds out then it is fraud. Why not list your parents as creditors and pay them back that way? They will be receiving money (from you) through the trustee and even though it would be considered an "unsecured" debt, at least you would have some peace of mind about paying them back. But please, do not commit fraud. List all of your debts! Good luck

[hybenamon]

RE> you must list the vehicle as it is a debt that you have. If you don't and the trustee finds out then it is fraud. Why not list your parents as creditors and pay them back that way? They will be receiving money (from you) through the trustee and even though it would be considered an "unsecured" debt, at least you would have some peace of mind about paying them back. But please, do not commit fraud. List all of your debts! Good luck

ANS> There is nothing legally on paper, etc about the loan. And I would rather let the creditors come after me than do that to my parents. They are in their 80s and I just can't do it to them. They would probably tell me not to pay them and even try and help me to avoid BK with funds. But I don't want that. And I will pay them back on my own. I doubt the trustie will look into the subject as it is to my "disadvantage" not to list it -- ie I am told that in figuring what I will have to pay per month that most trusties accept $250 for car payment as part of our living expenses. So it will mean that I will be paying "more" monthly to the trustie by not declaring it. Finally, I would like to thank everyone on this forum for their taking the time to give me advise.

BTW> I have discussed it with the wife and we are going to list it as an asset. The title is free and clear anyway. Again Thanks.

[bart]

reaffirm the car

why cant you reaffirm the car
i thought you can have a car
you need it to work

i myself am cought between a rock and a hard spot

i owe 200,000 in debt
i thought about bankruptcy and own a house with 3 cars

however im thinking of just riding out 10 years
ive changed all my phone #'s and deeded my house to my parents who willed it to my teenagers.

whats the worst that can happen?
im worried if i go for 7 that they will make me sell the house considering that i have 200,000 in equity.
my theory is dont pay the cc companies

[hybenamon]

Dear Member,

Yes, you can have a car for work and the Trustie will accept a "reasonable" car payment (ie most say about $250 a month).

I do not want to list my parents as the creditors on the car because it would devestate them. They deserve better than this in their last years. They are great parents. Unfortunately I have not been a great son. My wife even agrees 100% on this issue and it will effect her income.

As to "not" paying the CC back, I am sorry but I disagree. If I could I would and if later years down the road I will. I don't begrudge the BK court and the Chapter 13 payment. No one twisted my arm to use the CCs. I am an adult (at least age wise). Yes there were circumstances. But the CC debit was not all due to circumstances beyond my control.

Finally, on this we will just have to agree to disagree.

HybenAmon

why cant you reaffirm the car
i thought you can have a car
you need it to work

i myself am cought between a rock and a hard spot

i owe 200,000 in debt
i thought about bankruptcy and own a house with 3 cars

however im thinking of just riding out 10 years
ive changed all my phone #'s and deeded my house to my parents who willed it to my teenagers.

whats the worst that can happen?
im worried if i go for 7 that they will make me sell the house considering that i have 200,000 in equity.
my theory is dont pay the cc companies

[HRx]

why cant you reaffirm the car
i thought you can have a car
you need it to work

i myself am cought between a rock and a hard spot

i owe 200,000 in debt
i thought about bankruptcy and own a house with 3 cars

however im thinking of just riding out 10 years
ive changed all my phone #'s and deeded my house to my parents who willed it to my teenagers.

whats the worst that can happen?
im worried if i go for 7 that they will make me sell the house considering that i have 200,000 in equity.
my theory is dont pay the cc companies

Hi,

You're correct your property makes it very difficult for you to prove insolvency. Creditors would simply petition to have your automatic stay removed, to gain access to the property for its equity.

Since you're adament about not repaying your debts, the next bests thing you can do is let the debts fall off your credit report, and let the statue of limitations work in favor. The bottom line reality is, you're going to pay one way or the other.

Good Luck!