Just went to my free consult this week and got some disturbing news. We qualify for 7 by income, but thought about 13 to strip the HELOC. We knew our only asset was our car worth $10000 which is paid for (back when times were good). Anyway, we can exempt $5000 of that in AZ and will have to buy back $5000 worth. The kicker is that we have a new house that has many problems that we have been going through the ROC w/ for over 2 years. Since there is a $3ok "recovery fund" that can be filed for to correct workmanship issues, she says the trustee will consider that an asset. That seems so unfair since the work HAS to be done to fix the house if the $ ever comes in. Also, no guarantee we will actually ever get it. Now what? We can't afford to pay the trustee $30k over 5 years through a 13, nor upfront in a 7. Ughh
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Since you don't have the $30K, the Trustee would seek to get it from the Source, not you! This is why the Trustee asks "does anyone owe you money" at the 341 Meeting. Alas, this is all speculation that the Trustee would even waste their time. A smart lender (who holds your mortgage) should immediately, upon the Trustee's moves to get that money, assert that the lender is the payee and the Bankruptcy Estate is not entitled.
But that's just "my" speculation.
Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
Status: (Auto) Discharged and Closed! 5/10
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Any advice provided is not legal advice, but simply the musings of a fellow bankrupt. -
Consult with another attorney or two... or three. IMHO, the trustee taking money that is specifically meant to correct defects in workmanship make no sense. Not that the law always makes sense. Another attorney may give you a different answer.LadyInTheRed is in the black!
Filed Chap 13 April 2010. Discharged May 2015.
$143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!Comment
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Is this correct? Your home needs some immediate repairs. You have no cash, but do have 10k equity in a vehicle. Ask the next atty if you could borrow against the vehicle, do some of the home repairs,and wait six months. You would reaffirm the secured loan against your vehicle, and it would be exempt since it has no equity.1/15/10 Filed ch7 2/18/10 314 meeting
2/22/10 Report of No Distribution
4/20/10 Discharged 5/20/10 Closed!Comment
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I also am in AZ and at our consultation our attorney told us that with both of us together we could exempt $10,000 in a vehicle? Now I am confused?Comment
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Hmm... Tightgrip, that's what I had THOUGHT about the vehicle exemption. Now I'm confused too. Where in AZ are you?
Yes, we have leaks in my son's room from last rain...this is a new house w/ many problems. I know we should walk away, but I just can't do it.Comment
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Bk is all about a fresh start. There is nothing fresh about dragging a moneypit through bk.Originally posted by worriedmom View Post
If you know you should walk away then do it. There'll be other houses in your life.Comment
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Keepmine- We are upside down by $200k, however, we put $100k cash down on this house 3 years ago, so not like we haven't put anything into it. Also, left CA for this house and were dragged through construction issues for a year waiting to move in. Just got approved on a loan mod which also took a year. The loan mod does not reduce our principal, however makes our payments for 5 years about the same as renting as house. So I ask myself why would I want to live in a rental for the same price as living in my house. (I might as well stay here for at least the 5 yrs) Yes, the money will not gain us equity as we are so upside down...however at least in our house we can do as we please without dealing w/ landlords. Additionally we have 4.5 acres here...not tempting to move to a tract home to rent.Comment
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