Please help me, Im going nuts.

[RobbyNeedsHelp]

This is my situation,

I have property that I am paying a mort on, about 5 years ago I had $14k in legal expenses and I allowed my attorney to put a mortgage lien against my property to secure his fee's, he is now trying to foreclose on my property to collect his fees. My property mort is current and my parents have been paying them for me, I havent had a job for 4 years, I have no income tax returns, will this prevent me from filing 13? is there an answer? What if I go out and get a job now, will that help? I dont want to lose my property. Can someone help with some answers, pleaseeeeee

[SinkingFast]

If you are employed and have a regular source of income, you might qualify for a Ch 13 payment plan. Depends on your debt level and how the monthly payments are structured.

A Trustee cannot, however, approve a Ch 13 plan in good faith, if the Trustee believes the Debor/Filer does not have the means to pay the plan payments.

It's sad, but your only hope for relief from debt thru BK may be giving up your home and filing a Ch 7.

[CindyLou]

what state do you live in and how much equity do you have in your house? It may be exempt if you file chp 7?

[CindyLou]

not sure that made sense...i was thinking judgement lien....not sure if it would be the same thing.

[RobbyNeedsHelp]

Im in Florida. There is alot of equity in the property, the property is commercial. I use to own a business there but since 1999 I had to close it due to slow business. My family has been helping me pay for the property. If I prove that I have a job now and making enough money do you think that the courts will allow the 13? This atty that I allowed to do a lien years ago for his fees is trying to screw me right now and take away my property. He padded his bill from $5000 to $14000. We made a deal years ago verbally that when I sold my property is when I will pay him off, now he is going against his word. And trying to take it, I have no other alternatives than a 13. What do you guys think?

[HHM]

Since it is commercial property, there is not likely any exemption to cover it. So you, if you do a chapter 13, you will have to pay your creditors, through the chapter 13 plan, the same amount they would receive if you had filed a chapter 7. Thus, the entire equity of this commercial property, PLUS since this attorney has a "secured" interest, he must get paid in full through the chapter 13 as well. I am guessing, that could be a lot of money.

In any event, unless you have some sort of regular income, you CAN'T do a chapter 13.

What is the problem with selling the property?

Also, to be fair, the attorney apparently did some work for you, and deserves to be paid. I wouldn't expect him to wait forever...the additional fees are probably interest and his attorney's fees for having to foreclose. I just get a little irked when people skip out on paying professionals like lawyers, doctors, etc. and somehow feel like its right. With credit cards, at least, they are in the business of lending of money, credit cards only lose money which they can make back, and defaults are part of the business model, so they expect it. Professional devote their time, and they can't get that time back...so when you don't pay, it is almost worse than theft. Even a grocery store can replace a stolen cart of milk and perhaps eat into their margins to make up the loss, but the professional loses something they can't readily replace when they provide their time.

[Runnin on empty]

Nevermind, I'm in a foul mood. My apologies.

[SinkingFast]

ROE,...........

Many people come here not wanting to loose a thing. It's hard for them to see the forest for the trees.

Here's your situation in a nutshell, as it appears to me,............

You own a piece of Commercial Real Estate. You owe a debt. You are willing to pay the debt, but you do not want to loose the Real Estate in the deal.

If you have other assets of value that you could sell,......... Assets you are willing to part with such as expensive jewelry or a car,......... Once you sell the assets you'd make enough money to pay the debt, you could do that. But are you willing to do that??!!

Only you can answer that question. You will have to step back, take an objective look at your total situation, maybe even get some professional input from other sources, and make a decision.

You can Consult with some attnys. Generally BK Consults are free. You'll get professional Legal opinions of your options. Generally speaking, BK attnys' advice will be tilted toward filing BK.

Maybe also seek out the counsel of a Credit Counselor. Lay out all your finances and your assets. See what the Credit Counselor has to say. Here's a link to the DOJ approved CCA's:

http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm

Run your situation by a friend or relative that you trust. Get their opinion.

Sometimes it's tough to make the right call when your in the middle of the situation. Many times, a fresh pair of eyes and ears can filter out the "I wants" and see what really needs to be done.

This is a huge step in your life. Practice due diligence to give this decision the full attention it merits.

[RobbyNeedsHelp]

Thank you Sinkingfast for the detailed advice.

HHM Thank you for the advice also, Im not trying to run out on my atty fee's I never said that at all, Im having financial difficulties since I closed my business of 20 yrs. Debt $5000, 8% interest by law, foreclosure fee's, over 5 years does not add up to $14 plus thousand. I contacted my Bar Association and they are forcing him into Atty fee arbitration, he wouldnt do this voluntaringly in good faith or work with me. Even if they say I have to pay the 14k thats ok, Im not losing property worth 500k that I gave blood for to own.

[Spartan]

I don't understand. He can't just keep the total value of the property. He is only entitled to the $14,000, if the arbitration decides in his favour. What that means is, he will have to sell the property, takes his $14,000 + expense, and gives the rest back to you.

Either you sell the property and pay him his fees, or he will sell it for you and deducts his fees + costs. If your property is worth $500k, then, it doesn't mean he will keep the whole $500k.

Hell, if I were you, I would just sell the property and pocket the $500k, paid off the lousy $14,000 and invests the rest wisely. But that's just me.. I am sure you must have other considerations.

[HHM]

I don't understand. He can't just keep the total value of the property. He is only entitled to the $14,000, if the arbitration decides in his favour. What that means is, he will have to sell the property, takes his $14,000 + expense, and gives the rest back to you.

Either you sell the property and pay him his fees, or he will sell it for you and deducts his fees + costs. If your property is worth $500k, then, it doesn't mean he will keep the whole $500k.

Hell, if I were you, I would just sell the property and pocket the $500k, paid off the lousy $14,000 and invests the rest wisely. But that's just me.. I am sure you must have other considerations.

I have to agree with spartan here...take your profit in the property and move it to other investments, and pay off your debt. As Jim Cramer says, Bears make money, Bulls make money, and hogs get slaughtered. Take your profits, deal with the debt and make that money start working harder for you.

As for the fee dispute, all that decides is whether the attorney did the work for which you contracted and whether the fee is reasonable, you're probably going to lose that argument 9 ways to Sunday.

[RobbyNeedsHelp]

So if he takes my property he has to pay me the remainder? I have a 1st mortgage on this, does this mean he would have to pay off the 1st than me? Im confused. I owe 100k on the property, he is the 2nd mort on it at 14 k how does this work?

[SinkingFast]

Yep.

If your attny "Forecloses" to get his money, he'd pay off the 1st, take his money, and you'd get the remainder of the proceeds.

The 1st mortgage Lender has first dibs as their mortgage was recorded before any subsequent mortgages, liens, or judgements.

The thing is, the longer this goes on, the further the attny goes, the less and less money you get. BECAUSE, the attny can add his fees and interest onto the principal balance you owe him.

As has already occurred. You started out with what was a $5K debt, and now you're up to $14K. If the attny goes thru a formal Foreclosure to get paid, he/she can tack on all the legal fees, advertising costs, interest, etc, to what you owe the attny.

As the legal process goes further, your proceeds becomes smaller and smaller.

[HHM]

So if he takes my property he has to pay me the remainder? I have a 1st mortgage on this, does this mean he would have to pay off the 1st than me? Im confused. I owe 100k on the property, he is the 2nd mort on it at 14 k how does this work?

Yes, the attorney would have to get enough to pay the 1st mortgage.

But heres the catch...if the property it acutioned, the opening bid (and probably the only bid) will be only for the total of the 1st and 2nd mortage. So if you have a first for $100K and the 2nd is $14k, guess what the building will fetch at auciton, $114K. So you could be in for a big loss if you let this attorney foreclose.

Again, sell the property and lock in your profit.

[RobbyNeedsHelp]

I called the atty today to pay the debt, he laughed at me and said he wanted 22k to end it, what do I do now?