Options OTHER THAN Chapter 13

[badjuju]

Hi all,

First off, thank you SO MUCH for the responses to my first post: (I cant link posts yet as I dont have enough, but its on this board and is called NEED-HELP!-Chapter-13!

We have been asked by my husband's mother to help with a BK filing that they began in 2009, and never completed it to make it to court....we have uncovered A LOT while doing this...things that have been hidden from us, which most likely was the reason why they were so secretive about how bad their situation was. Our issue has been, that even though we have been asked to intervene, they still refuse to change their ways and get oppositional when we need information....Make up your mind already!!!

Anyway, I had a good chunk of the information collected over the past 6 months. Because my husband's father is self employed, the process is different and the business information must also be included. I received today from the lawyer, forms that layout the information required from the business. To most people I would assume this would not be an issue as you would ask your business accountant for the information and WHAM-O! you would be fine. Well, if you cant already guess, the father runs the business like he runs his personal finances and there IS NO accountant and the business is a complete disaster! My husband cannot help on any of this because the Power of Attorney does not reach over to the S corp.

Anyway, this is just another reason showing that actually getting approved for 13 and then following through with the 5 year period via the trustee just ain't gonna happen!

Are there other ways we may be able to work with this? The lawyer wont speak to us unless we meet with her and pay (which I understand, there is very little of the retainer left because they have been dragging their feet for 3 years) but we are going to meet with a financial consultant friend who wont charge us and will hopefully give us options...but until then, maybe some of the experts here can give us info? Our approach will the parents will probably be something like: "You need to get an accountant to do your business info and have it completed immediately (give date, and if they dont do it, we walk away...) OR you can do option b,c,d, etc...

For example - can they sell their house and pay off the debt with the $$ from the house or would that $$ already get grabbed. Right now there are no judgements against them, but its only a matter of time before they are sued by the cc companies so by the time they DO sell, there may be....

Or can we get them into 7 - they do not qualify because their income is too much and the debt is high, but not high enough. The lawyer said they cannot do 7 because of the income. Any other ways to get into 7?

Anyone have any ideas they want to shoot out that we can discuss with the appropriate professionals?

[HHM]

Anyway, this is just another reason showing that actually getting approved for 13 and then following through with the 5 year period via the trustee just ain't gonna happen!

First impressions is that that statement is a cop-out. They either want to solve the problem or they don't? If they have no desire to solve the problem, then no solution will work.

If income is too high, unlikely they could do a 7. Now, with businesses, the business owner needs to be able to prove business expenses.

The difficulty, it appears, is that there are not good records. Although that is a challenge, it is not a barrier to chapter 13.

Yes, they could sell the house to pay the debt, assuming there is enough equity to do so. But selling the house will take time. You say that there are no judgments yet, but if it took 8 months to sell the house, would there be judgments at that point? Generally, it is better to file chapter 13 than to "self liquidate".

[kawh]

... For example - can they sell their house and pay off the debt with the $$ from the house or would that $$ already get grabbed. Right now there are no judgements against them, but its only a matter of time before they are sued by the cc companies so by the time they DO sell, there may be....

Or can we get them into 7 - they do not qualify because their income is too much and the debt is high, but not high enough. The lawyer said they cannot do 7 because of the income. Any other ways to get into 7?

Anyone have any ideas they want to shoot out that we can discuss with the appropriate professionals?

If their debt is mostly non-consumer debt -- in other words, if your father -in-law spent most of what they owe for his business -- they do not have to pass the means test for Chapter 7. A little loophole for the self employed. If they really are going under, and it's just a matter of time, they may want to save whatever equity in their house is exempt.

[HHM]

If their debt is mostly non-consumer debt -- in other words, if your father -in-law spent most of what they owe for his business -- they do not have to pass the means test for Chapter 7. A little loophole for the self employed. If they really are going under, and it's just a matter of time, they may want to save whatever equity in their house is exempt.

True, but don't forget, the home mortgage on the primary residence counts as consumer debt.