Preparing for Chapter 13

[tank3d]

ok....here is my story

50K credit card debt.
1st mortgage 225,000, 2nd mortgage 55,000, house worth 220,000
Car #1 Loan 22,500. Car #1 worth 16,000.
Car #2 Loan 24,000. Car #2 worth 15,000.
Car #3 Loan 15,000. Car #3 worth 15,000.
Car #4 no loan. Car #4 worth 4,000.

I am self employed and have been paying myself $6,000 per month...this is just to make the ends meet. I need to start paying myself 3,500 per month to get the business profitable. My business is an LLC, or which I am 50% owner. Currently the liabilities are more than the assets. Our last 4 months P&L show a loss each month.

I am renting our the house I own, and have moved to be in the same city as my business. I am currently leasing a house for 1900 / month.

Regarding the $50K in credit card debt...$25,000 of that is on a card that is guaranteed by my dad.

So, what I want to do is get that $25,000 into my name. My plan is to (since I still have very good credit) do a balance transfer to get rid of the balance on that card.

Here is what I want from the BK.
- I want to walk away from the house we own.
- I want to walk away from Cars 1 & 2.
- I do not want anything to negatively impact my business, or affect my company at all.
- I want to reduce my income over the next 6 months to show a lower income to the BK court.

Do you think this plan is doable? I think this can be like a 6 month plan before the 13 actually gets filed.

please let me know where you think I am going to hit some bumps in the road.

Thanks

[falken]

The LLC is part of your estate (50% of it anyway), if you don't have a lot of equity in anything or a lot of money it may not be a problem. Cases with a business are always tricky. Make sure you find a really good lawyer.

If you are going to do the 25k balance transfer you need to make sure you continue to make the payments for the 6 month period you are waiting to get your income down, if you can try and get a lower APR then the balance is at right now because then you will have a better reason for transfering the balance if questioned.

[Flamingo]

You need a good business BK lawyer and your question as to the transfer of money cold be a big issue because trustees can look back further than six months as to financial transactions. Six months is just the average look back period. We were not a business and we had to provide one years worth of checking, savings and other statements. You will also have to have an appraisal done as to the house just prior to the Bk filing and since you will have to wait six months, the value will more than likely increase as housing values are starting to rise. What you want to do and what you will be able to do may be two different things.

[tank3d]

would it make sense to get my name off the business? at least temporarily? If that makes sense in the short term...would I be able to put my name back on my business during the chapter 13?

[falken]

would it make sense to get my name off the business? at least temporarily? If that makes sense in the short term...would I be able to put my name back on my business during the chapter 13?

Nope. You need to list any corporation you were an officer or owner of for the past 6 years. Taking your name off would just tell the trustee you are trying to hide assets.