Good morning! It's been a couple of months since I posted, but I still read daily. At the time, I had regular employment, plus cash flow positive rental properties, but high debt from my wife's medical bills. An unexpected bonus from my employer had given me the cash to weather a storm of unexpected repairs and bills.
So fast forward. I'm still doing okay, and hopefully able to avoid a C-13 filing. But I have a situation and I would like to ask a couple of questions, please.
My mother has offered to loan me 20,000 dollars to recapitalize my rentals (my cash reserves are growing, but right now are still scary and low.) The terms are 3.75% interest, 10 year payback. The loan note is to be notarized and secured by an interest in one of my houses (she likes this particular house very much.)
Thinking ahead... if everything goes to Hades again, how do I protect her in a bankruptcy?
The note is secured against one of the houses, so I'm thinking that it is treated like any other secured debt: paid during the plan like a mortgage. But there is already a first mortgage on the property... would the trustee wipe out my mother's interest in the property? (The two loans together are still less than the value of the house.)
Arkansas law doesn't require a lien be filed against the property, but I'm wondering if I should do so anyway in case of trustee questions about the validity of the loan.
Any thoughts about this situation?
Thanks!
So fast forward. I'm still doing okay, and hopefully able to avoid a C-13 filing. But I have a situation and I would like to ask a couple of questions, please.
My mother has offered to loan me 20,000 dollars to recapitalize my rentals (my cash reserves are growing, but right now are still scary and low.) The terms are 3.75% interest, 10 year payback. The loan note is to be notarized and secured by an interest in one of my houses (she likes this particular house very much.)
Thinking ahead... if everything goes to Hades again, how do I protect her in a bankruptcy?
The note is secured against one of the houses, so I'm thinking that it is treated like any other secured debt: paid during the plan like a mortgage. But there is already a first mortgage on the property... would the trustee wipe out my mother's interest in the property? (The two loans together are still less than the value of the house.)
Arkansas law doesn't require a lien be filed against the property, but I'm wondering if I should do so anyway in case of trustee questions about the validity of the loan.
Any thoughts about this situation?
Thanks!
Comment