Problem filing in NY because House is worth too much

[gordon333]

Hey all,

I just consulted with a Lawyer today about filing for chapter 7 or 13 and after having an appraisal of my house, they said I had too much equity in the house to file. He said I wouldn't be eligible to file for chapter 7, and if I filed for Chapter 13, I would have to pay everything back i owe, but on a payment plan. And if I did chapter 7, I would lose my house, which I don't want to do. I was wondering if I transferred my name to another person for the house, would I be eligible to file for chapter 7 or 13? How long would I have to wait so that this doesn't come up as suspicious activity? Any assistance would be greatly appreciated. Thanks.

Gordon

[Viper]

Trying to hide assets is fraud. If you tried this and got caught, your bankruptcy would be dissmissed and you would never be able to include these debts in a future bankruptcy.

I am not a lawyer, this is just what I have learned from my research. The mod's on this site are great and will correct me if i'm wrong or have missed something.


-Viper

[HHM]

Under the new law, I think the look back period for fraudulent transfers is 2 years.

I think you are stuck. The only way to legitamatly transfer an asset in the eve of bankruptcy is to sell it for fair market value...in which case you would have all kinds of cash.

What are your debts like, if you have that much equity in your home...you might want to tap that to help alleviate some of the debt. Generally, I don't like advising turning unsecured debt into secured debt, but if you have no other choice...

[gordon333]

Thanks for the input HHM, Viper. That really puts me in a bind. I was looking to consult with another lawyer too just too see what could be done...something like an exemption. My debts are as follows:

Credit Card: 57,909

Car Lease - Remaining: 18,435

House - Remaining: 128,341
Original Purchase Price: 148,000


Gordon

[hhou812hh]

Thanks for the input HHM, Viper. That really puts me in a bind. I was looking to consult with another lawyer too just too see what could be done...something like an exemption. My debts are as follows:

Credit Card: 57,909

Car Lease - Remaining: 18,435

House - Remaining: 128,341
Original Purchase Price: 148,000


Gordon

Are you the sole owner of the house? Do you have a spouse, partner? NYS just raised the exemption from 10k to 50k and 100k for joint filers. This means that 100k of home equity is exempt.

Even though HHM mentioned earlier that the current look back period of 1 year will be raised to 2 years, if you transfered property whether it being a car or a house even 3 or 4 years ago and are still using the property as if it was your own that may constitue fraud, so transfering it is pretty much out of the question.

[StaciMM]

Gordon-you mentioned the purchase price, but what is it worth now?

[gordon333]

hhou812hh,

Yes I'm the sole owner of the house and single. Ahh, I see, so if I'm still residing in the residence then transferring ownership and waiting wouldn't help either. Ugh.

StaciMM,

I just had the house appraised about 4 days ago. I was informed it was worth 303,000.

Would this matter? I've never made a payment on it. My parents have been making all the payments on it. They live with me. Even though it is in my name, I've never written a check for the mortgage.

Thanks again for the help everyone.

Gordon

[HHM]

This may sound a bit like "lightening", but if you have the assets, instead of figuring out how to "have your cake and eat it to", why not just pay your creditors. You have over $150,000 in equity and your parents are making the house payment...what is the problem here, fill in the picture for us, because something is not adding up, what is going on that is making BK an option for you.

[Lightning]

Housing costs usually make up the largest chunk of a person's expenses. Since you have no housing costs in your budget, where is your money going? Do you have a job?

[gordon333]

Well, I might as well state the position I'm in. I've had an experience whereby I am planning to become a Buddhist monk in Thailand. In order to become a monk, I must not have any debts. I'm sure this sounds completely outrageous, but it is true. Basically, I need to be debt free before I become ordained.

Gordon

[Genenco]

Well, I might as well state the position I'm in. I've had an experience whereby I am planning to become a Buddhist monk in Thailand. In order to become a monk, I must not have any debts. I'm sure this sounds completely outrageous, but it is true. Basically, I need to be debt free before I become ordained.

Gordon

Well Gordon, I'm not one to laugh at others (Usually) so I'll let this pass. BUt in my life, the path of "Enlightenment" is a path we walk to learn from it to basically know that our future would be better without the materialistic part of ourselves.

However, this path cannot be walked in a day, week, month or year. It takes time, you sound like you're rushing things.

Frankly, I think if you got the equity loan on the house, paid the debts then gave the entire kit and kaboodle to your parents, you might be in the clear.

[robivi3]

Yes, to be honest it sounds outrageous.
How about sell the place, pay the debts, put a sizeable chunk on a nice Condo for the parents?

Man, you have generous parents!

[Lightning]

If a Buddhist monk isn't to have any debts before being ordained, I would think he shouldn't file bankruptcy to achieve this goal. Talk to your temple leaders about this. Defaulting on your financial obligations does not sound like a good first step onto a new path.

[StaciMM]

I'm guessing that even though the house is in Gordon's name, because his parents are making the payments that he feels the equity is theirs.

If you are supposed to be debt free before becoming a Buddhist monk, my gut instinct tells me that you are supposed to reach that goal by satisfying your debts-not filing BK on them.

Gordon, it is very unlikely you'll find a way around the equity issue and be able to file BK either before or after 10/17. I don't know your income, but assuming you live in the house w/ your parents, your expenses can't be too extreme. Perhaps spend the next few years agressively paying down your debts. Then, if you still want to become a monk you will have gotten rid of your debts the old fashioned way. And, if you have changed your mind then you'll at least have very little debt to worry about.

[sunshine08]

I think you have gotten all the "good" advice you are going to get. Sorry if it is not what you want to hear. We don't make the rules.