Question about chapter 7

[ozzy866]

Chapter 7?
I live in Florida and owe 16K in CC debt.
I am a co owner on Mortgage 239K owed with 50K equity. And a couple medical bills $3000.
I am back after 10 years of doing a great job for most of it. I am going to change many things.
Will I lose the house or equity? Also my last charge on CC was 4 months ago for $500 medical. i co own a car that is paid in full with girlfriend the car. Its worth 7K.
I am on Social security diabilty and make about $1675. My portion of mortgage is $850
My co mortgager is my girlfriend.
What will i lose? Or is there any suggestions on debt payment companies or anything else besides BK?


Any thoughts, suggestions or questions?
Thank You!!
Oz

[justbroke]

Florida has an unlimited homestead exemption. All equity in the home is protected, especially if you owned if for more than 1,215 days (or about 3.3 years)--even then you would be $146,450, or $292,900 jointly. You are no where near that limitation anyhow.

Your issue is going to be the equitable interest in the vehicle. The exemption for a vehicle in Florida is a paltry $1,000. While there is a $1,000 wildcard of sorts, you need that to protect all your other property (furnishings, clothing, etc).

Maybe you could get a small HELOC to cover some things, but most HELOCs requires a FICO of 680+ and that you have more than 90% of the property value in loans (including the HELOC). So if your property appraised at $290K then you may be able to borrow about $20K or so and still have more than 10% in equity.

You'll have to play with the numbers and see what works better.

[ozzy866]

My scores are around 580.
Bk? Can't do a heloc...I tried. I am out of money.
thinking about debt help companies.

[justbroke]

Debt management plans (DMPs) and companies that offer them don't actually help most debtors. As many as 70% of those on a DMP don't ever complete the plan which means... wasted money. A good number of them end up filing bankruptcy anyhow which indicates that they only delayed the inevitable. Since you are already in the 500s you may want to consider bankruptcy rather than trying to stave off bankruptcy.

A bankruptcy issue is going to be how to protect things. How is the car titled? Is it titled as "X and Y" or in some other ownership type (such as "OR" between the names)? The car is the likely the biggest problem. You should also look at how you hold title to your home as well, although the home is likely 100% exempt.

I suppose you could try debt management and if the payment is under $300 a month, it may prove workable for the time being. I just don't know.

[ozzy866]

The car is titled as or. As long as I can keep our home and car I am ok with bk7. I don't make very much money on disability. Does bk sound like best decision Thanks for your continued help!

[justbroke]

Wow, I think we just got lucky!!!

Effective July 1, 2024, the Florida statute that covers the vehicle exemption was modified. It now protects up to $5,000 in a single vehicle of the debtor. I didn't even realize this happened because this bill was previously passed but vetoed by the governor. The governor wanted more protections in the updates. I don't know what happened, but it was signed by the governor in late April 2024.

I apologize because the current version of the Statutes (still labeled as 2023) shows F.S. 222.25(1) as $1,000 in a vehicle. That was modified to $5,000 in a vehicle.

So, your vehicle seems like it would not be at issue.

I cannot make a recommendation, but if you file after July 1, 2024 then the new Florida Exemptions allow protection of up to $5,000 value in one vehicle.

Source:
Press Release: https://cdn.ymaws.com/nacba.org/reso...d_into_law.pdf

Enrolled Bill: https://www.myfloridahouse.gov/Secti...8&Session=2024

Effective Date of Law: July 1, 2024

[ozzy866]

You are always very helpful. I am going to file chapter 7 in August.
Thanks