Credit Union

[cc8225]

Hi I have my initial consultation Nov 11. I joined a Credit Union three years ago and took out a secure line of credit 55K and transfered other balances to a credit card 20K . Will the credit union ask about my eligibilty as a member or question the person that sponsered my membership. I have not made any purchases on the CC in 90 days. Is accumulating that much debt in 3 years a red flag to the Trustee or Credit Union? What are the chances they show up at the 341? This credit union is very large with over 2 million members.

Thanks
CC

[AngelinaCatHub]

You said it was a secured debt. I doubt any red flag will come up as you will be paying it in a C13. It is easy to rack up even that much money in a day. Have a "skill saw" accident as I did some years ago. 55k for the surgery. It was weird as the last day in the last hour I signed C.O.B.R.A. authorization (we were looking for cheaper health insurance) and got a receipt. That was 10:30 am. The accident occurred at 2:30 that afternoon. Talk about divine providence. 'Hub

[cc8225]

Hi,
The secure debt is a third fixed equity line of credit I was hoping to discharge that in the 13. Any thoughts?

[lrprn]

Is accumulating that much debt in 3 years a red flag to the Trustee or Credit Union?

What's important isn't so much the amount as being able to show that when you took the money you had a reasonable ability to pay the loan and cc back. Did you?

What are the chances they show up at the 341?

If the CU has an objection to discharging what you owe them, they are more likely to file an official objection with the court before or after your 341. Creditors who show up at the 341 are more typically lawyers representing local businesses, friends, or family members you owe money to. Not saying your CU showing up isn't possible - just saying that since it's a large national CU, it's not likely.

The secure debt is a third fixed equity line of credit I was hoping to discharge that in the 13. Any thoughts?

You can't discharge a secured debt in a 13 unless you surrender the collateral (unless you are stripping a second mortgage since your house is worth less than the first mortgage). What did you use as collateral for your equity line of credit? Are you willing to surrender it to discharge the loan?

[cc8225]

Thanks,

Yes, I have been on time with every payment on my cc and third equity loan with the CU. Now I am barely able to keep up with minimum payments due to increase in interest rates on other cards, overtime reduction, and a growing family.

[cc8225]

We took the third out three years ago when we had equity in the house to do so. Now the house is worth 350 or so and we owe 425K between the three mortages. I was hoping that there was a chance to strip the third but i doubt it since it is a secure loan and we do not want to lose our home.

[lrprn]

We took the third out three years ago when we had equity in the house to do so. Now the house is worth 350 or so and we owe 425K between the three mortages. I was hoping that there was a chance to strip the third but i doubt it since it is a secure loan and we do not want to lose our home.

Remember I said that the exception to asset surrender in a 13 is when a home is worth less than the first mortgage and you want to strip a second mortgage.

In your situation, you can keep your house and strip your third mortgage *if* the current market value of your home is less than what you owe on mortgages 1 and 2. Is it?

Even better, if the current market value of your home is less than just your first mortgage, you can strip mortgages 2 *and* 3 when your Ch 13 plan is successfully completed.

The key is to get a reliable current market valuation of your home. That is not your value for tax assessment and it's not Zillow or other online house valuation sites. The most legally strong way to get a reliable home value appraisal is to get an official real estate appraisal (costs several hundred $$). A quicker and cheaper way (but not as strong as proof for the courts) is to look for comparable sales in your neighborhood in the last three months or ask an experienced realtor or two to give you an estimate of what to price your home to sell it right away. Those give you pretty reliable information to make a decision about whether you can mortgage-strip when filing your 13 or not.

You say the current value of your house is $350K. How did you arrive at that value? What will you still owe on each mortgage 1, 2, and 3 when you file your 13?

[cc8225]

Hi,

I arrived at 350K based on zillow. However, after looking at comparable houses on the market that figure may be incorrect. There is a house similar to mine with a list price of 299K. This house is showing under contract with a knock out clause. I am on time on all three mortgages. I owe 295,920.00 on the first, 69,103.00 on the second and 55,813.00 on the third. Thoughts?

[lrprn]

Hi,

I arrived at 350K based on zillow. However, after looking at comparable houses on the market that figure may be incorrect. There is a house similar to mine with a list price of 299K. This house is showing under contract with a knock out clause. I am on time on all three mortgages. I owe 295,920.00 on the first, 69,103.00 on the second and 55,813.00 on the third. Thoughts?

Given what you owe on your three mortgages, I would consider paying for a certified appraisal of your home's value from a professional appraiser. If your home's current market value comes in less than $295K, then you should be able to strip both the second and third mortgages when you file your 13.

[cc8225]

Thanks for the advice Lrprn..