Questions on just why my Chapter 13 payment quote was unbelievably high

[newbie2]

What do you mean, I would'nt be transferring it to anyone, just taking my name of off it. Reading these post I can see where this may really not work. But we do want to settle, so maybe that will work.

By taking your name off of it, you would be giving away your equity in the home and making it solely your husbands.

[forgotten]

We both want to settle. That I think is the very best way to go. I just hope we can do it. My husband wants to use a company to go through. I want a reliable one. We go to a Consumer Credit Counseling service next week, that is very legit. I am sure they will be able to advise us on this. I mean if we were to offer them 50 cents on the dollar cash immediately to settle the debt, I just wonder if they would like that.

If you stop paying your credit cards after 4-6 months many of the companies start sending settlement offers themselves and are more than happy to discuss settlement options with you. While counseling services may be able to help you settle they take a portion of that in fees so you usually end up paying more than if you did it yourself. If you have 15k cash available immediatley to settle 30k in debt then you should not have a problem doing so. However, don't forget about the tax implications, if you settle the $30k for $15k you will owe taxes on the $15k that was forgiven. You just need to be prepared for a $4000 or so tax bill at the end of the year. Whatever you decide, I wish the best of luck!

[IamOld]

And if I may add...aside from the legalities - don't do a separation for this...unless you and husband REALLY are thinking about doing that, such things have a way of snowballing...if yuo want to stay married - don't do it.

If your Dad can lend you guys the money to settle this...then so be it!

[catleg]

I would suggest trying to have someone at arms length negotiate the settlement, either dad, a family friend, or (chills) lawyer. I think you get a better deal that way, much like buying a car.

[Pandora]

if 30K is your only debt (credit cards) - and you have 200K in equity in your home... the obvious would be NOT to file BK nor to go to a credit counseling service; it would be to cash out 30K in equity and pay them off in full. Why borrow $ from your father to pay it off when you have the $ sitting there? You would be in a 100% payback at any rate if you filed BK...

??? Am I the only one seeing it that way or... ???

As to the rest of your postings - agree with the others - what you're proposing to do in some instances would likely be fraud

[forgotten]

if 30K is your only debt (credit cards) - and you have 200K in equity in your home... the obvious would be NOT to file BK nor to go to a credit counseling service; it would be to cash out 30K in equity and pay them off in full. Why borrow $ from your father to pay it off when you have the $ sitting there? You would be in a 100% payback at any rate if you filed BK...

??? Am I the only one seeing it that way or... ???

As to the rest of your postings - agree with the others - what you're proposing to do in some instances would likely be fraud

That was my thought too. Their credit could be too far trashed to get a home equity loan, but I would still think you could find a bank willing to lend $30k if there was 200k in equity. Of course, if they can not afford the payment on a 5 year 0% repayment plan (chapter 13), perhaps the best plan would be to sell the home, pay off your debt, and rent or buy a cheaper home with the cash you made from the sale.

[Pandora]

forgotten....

Thats another option as well - could put the house on the market and buy a much cheaper one, probably the same size / space as the one they currently have. In the process I'd still pay off the 30K with equity...

I honestly didnt think $600-700 was high in payment for CH. 13; ours is $600 x 60 mos. Not too bad given we are under median

[frogger]

While I understand your thinking, you're going to be in for a world of hurt if you go down that path.

You can't just "give" your property away, you can't just "transfer" the property away, you can't do any of that without creating a multitude of problems that the trustee is going to correct.

If you want to get rid of your house, then sell it to an outsider, aka "arms length transaction".

If you want to get rid of your house, then sell it to an insider, ie family/friends at a FAIR market value, and be prepared to document that value.

Then, you have the funds to pay your bills, and you need to document how you spend those funds if you intend to file bk.

Everyone wants to pre-plan their bk, however their is a huge difference between pre-planning and attempting to defraud your creditors.

If you do any of the things that you are proposing, understand that the trustee has the power to reverse them.

$200k in equity in the house? Sell the house, pay your bills, and start over that way. The games that you are considering are dangerous......

[df04527]

I belive OP may be referencing a CRedit Counseling service only. Those are legit and they are, for the most part, free. They will help you understand your finances and offer YOU ways to get out of debt. Now if your talking about a service that does this for you, for a cost -- run, don't walk as they are looking to capitalize on your financial mess.

[Shelly3630]

I want to thank all of you once again for your help. You have really opened my eyes about what can and cannot be done. Yes, I can get 15 grand in the drop of a hat, and that is what I am going to try to do to settle. Selling our home and land is not an option, as my husband will not do that. And you can't get much for a house these days, even though I admit I think ours would sell because of the land, view, privacy, ect. No, we are not going to separate. Silly me. 15 years of marriage in a few weeks. Never thought it. But, I am hoping the Credit Counslers will be able to advise us to a legimate and reliable agency to help us settle. My husband does'nt mind paying a company that is really reptuable for this service to do it. And neither do I. And I too, believe as well as my husband thinks that I should get some psych care as this has taken a toll on me that I can barely bare. A complete breakdown in my mental health has had something to do with this mess I or wait we are in.

[IamOld]

Hello Shelly - regarding settlement - there are a LOT of semi-shady characters out there - as other posters mentioned, if you can and want to settle, it is best if you have an attorney handle this for you...if you've talked to BK attys (which I think you did), they may know such folks, and/or they may do the work for you for a FAR more reasonable fee than "debt settlement" outfits. There are also lawyers that do debt collection defense work that may also do the same. I would say that if you have a lawyer do it for you, a) as the others have said you're not involved as such, b) the "otehr side" sees that you're one step from BK, which means that they are likely to get nothing.

Just my very humble opinion.

By the way, if you need help, go get it - no shame in that - I'm seeing a therapist also (have to sometimes think - Am I Tony Soprano seeing a therapist of Monk seeing a therapist? :-)

I want to thank all of you once again for your help. You have really opened my eyes about what can and cannot be done. Yes, I can get 15 grand in the drop of a hat, and that is what I am going to try to do to settle. Selling our home and land is not an option, as my husband will not do that. And you can't get much for a house these days, even though I admit I think ours would sell because of the land, view, privacy, ect. No, we are not going to separate. Silly me. 15 years of marriage in a few weeks. Never thought it. But, I am hoping the Credit Counslers will be able to advise us to a legimate and reliable agency to help us settle. My husband does'nt mind paying a company that is really reptuable for this service to do it. And neither do I. And I too, believe as well as my husband thinks that I should get some psych care as this has taken a toll on me that I can barely bare. A complete breakdown in my mental health has had something to do with this mess I or wait we are in.

[salsa]

There is so much information on the internet about settling on your own, and not dealing with these outside firms. Not sure if you have the 'stomach' for that or not, but you may want to try and do on your own. Therefore, you don't need to pay anyone a fee for it. Just realize that settling will mess up your credit if it isn't already...

[Shelly3630]

Ya, my credit is shot already. I have one cc I have'nt paid in like 8 months. I could do it on my own, but I just rather find a good lawyer or firm to do it so it won't stress me out. I am real optomistic about the settling though. And yes, I am ashamed to see a shrink, but I really think I need to, but gosh part of me really does'nt want to. But I think my husband will push it. Not sure though. Hey but if yall could direct me to some of the info on settling on your own on the net I would love to read it.

[IamOld]

There's no shame in seeing a shrink. It helps to talk (although I wonder what the guy REALLY is doing for his $20 copay and money from ins co :-) But spouse pushed me as well (even though I think BOTh of us should be going).

Hey if Tony Soprano can go see a therapist...

I'd go with a lawyer NOT a debt settlement firm - a pitbull consumer rights atty and/or bk atty who may also do this for you.

Ya, my credit is shot already. I have one cc I have'nt paid in like 8 months. I could do it on my own, but I just rather find a good lawyer or firm to do it so it won't stress me out. I am real optomistic about the settling though. And yes, I am ashamed to see a shrink, but I really think I need to, but gosh part of me really does'nt want to. But I think my husband will push it. Not sure though.

[newbie2]

if 30K is your only debt (credit cards) - and you have 200K in equity in your home... the obvious would be NOT to file BK nor to go to a credit counseling service; it would be to cash out 30K in equity and pay them off in full. Why borrow $ from your father to pay it off when you have the $ sitting there? You would be in a 100% payback at any rate if you filed BK...

??? Am I the only one seeing it that way or... ???

As to the rest of your postings - agree with the others - what you're proposing to do in some instances would likely be fraud

Nope, I see it that way also. But OP explained in other postings that the spouse won't have any part of "parting" with possessions.