Hi, seeding helpful advice.

[Jupiter8]

Im a caring son who's trying to figure a solution out for my dad. My dad who is 71 has credit card debts totalling around 40k. At the moment, he is able to pay the minimum on these bills. But Im afraid when he retires soon, he might not be able to pay minimum.

Therefore, I am researching on filing for bankruptcy on behalf of my dad. We pay mortgage on a house, and I dont want that to be affected. Im sure we will be able to continue mortgage payments. I have student loans that he cosigned for, Im not sure if these loans count toward the debt. After all the living expenses and mortgage, IM not sure if there enough to pay the credit cards. So mainly, Im looking into filling a chapter 7 to eliminate his credit card debt. Im not familiar with these laws and the economics of it, but do you think this is a feasible option. I just want him to enjoy his retirement and not to have to worry about the cc debt.

Any advice? and do you think we should go ahead and file?

[DebtEnder]

In a chapter 7 there are two main things to look for.

1. how much has your dad made in the past 6 months and in what state does he reside. His state determines the income level neededfor easy chapter 7 filing.
2. The amount of equity he has in any car, house, or other assets with his name on them.

If you are paying for his home but he has the deed to it then it is his asset. If there is equity in it in excess of what can be exempted it could be a problem. The student loans are not discharged anyways but any loan he co-signed for otherwise would be discharged and the creditor would come after the other signer for payment. If you are paying these debts yourself anyways that should not be a issue for you.

So what you need to know is how much did HE make in 6 months, and how much his stuff is worth at a quick sale price.

[Jupiter8]

Thanks for the response. Im kinda new at this so let me clear up some points.

He is paying for the mortgage and it is under his name.

"If there is equity in it in excess of what can be exempted it could be a problem." what do you mean by this?

In a chapter 7 there are two main things to look for.

1. how much has your dad made in the past 6 months and in what state does he reside. His state determines the income level neededfor easy chapter 7 filing.
2. The amount of equity he has in any car, house, or other assets with his name on them.

If you are paying for his home but he has the deed to it then it is his asset. If there is equity in it in excess of what can be exempted it could be a problem. The student loans are not discharged anyways but any loan he co-signed for otherwise would be discharged and the creditor would come after the other signer for payment. If you are paying these debts yourself anyways that should not be a issue for you.

So what you need to know is how much did HE make in 6 months, and how much his stuff is worth at a quick sale price.

[willbfree]

Dad needs to speak directly to a GOOD bk atty. Most have free first consultations. If Dad is almost ready to retire his retirement sources of income may be judgment proof. Only an atty can provide that advice after reviewing his financial records. Dad needs good legal advice to protect his retirement assets.

[Jupiter8]

Dad needs to speak directly to a GOOD bk atty. Most have free first consultations. If Dad is almost ready to retire his retirement sources of income may be judgment proof. Only an atty can provide that advice after reviewing his financial records. Dad needs good legal advice to protect his retirement assets.

what do you mean by judgement proof?

[DebtEnder]

In a bankruptcy chapter 7 type then all debt, aside for student loans and other Domestic type payments, gets discharged. The caveat to this is stuff of value gets sold at quick sale for cash to be distributed to creditors.

However depending on what state he lives in he has certain monetary limits of assets he can protect. I'll cite my examples to give you an idea.

I am married with one child our total income based on the 6 month lookback period was under the state median for Georgia, therefor I did not have to 'prove' my expenses to file. I have a house which is my primary residence which I have MAYBE 5-10k equity in(it's worth ~200k I owe 192) As I live in Ga and filing jointly I can protect up to 20k of equity in my house. Therefore my home can not be sold to pay off creditors. I have 3 cars, one of which I am giving up anyways so it's moot, the 2nd I owe slightly more then it's worth, so no value there. The lien holders have to be paid before other creditors would get paid. The third it's nearly paid off but only worth about 4k. In Ga I have a 3500 exemption so I can protect 3500 worth of car. Other things include household goods like beds, tables, couches, tv's etc etc. In may case it was up to 3500 of stuff which I was well under.

As such as you can see based on my sig I was declared a NO ASSET case and therefore I do not have to have anything sold to pay my debts. My concern in your case is if your father has had the house for awhile that he had paid down a great deal of the mortgage and may have a fair amount of equity that can't be exempted. Knowing how much he owes, what the house and cars may be worth and what state he lives in would be useful info.

[DebtEnder]

Dad needs to speak directly to a GOOD bk atty. Most have free first consultations. If Dad is almost ready to retire his retirement sources of income may be judgment proof. Only an atty can provide that advice after reviewing his financial records. Dad needs good legal advice to protect his retirement assets.

Depending on he state I have read some case law that seems they could attach bank assets or even place a lien on the home for the debt. This means when the house is sold, or deeded to a new party they would have to be paid before I clean title could be created. This depends VERY much on the state however.

Judgment proof does not simply mean no garnishment income. They could get a writ for bank accounts or other investment monies.

The idea of being judgment proof is the idea that even if you get sued they could never get any money out of you. Most often this is done by having the debtor income garnished up to 25% of his pay. Some states do not allow garnishments for many debts but as I said before there are other options to get money.

[Recessionist]

I really can't tell you if you should or shouldn't file, but doing research now to help you help your Dad is good. Based on some of your questions, I would recommend that you do a couple of things first.

1. Get as much of a picture of your Dad's debts, expenses and assets as you can. Start getting really comfy with making spreadsheets to help you keep track. Work with your Dad to pull his credit reports at annualcreditreport.com (While you're at it, do the same for yourself.)

2. Do some google searches, and search this site for terms like: "what is bankruptcy?", "bankruptcy guide", "bankruptcy terminology", "chapter 7 means test", "deciding to file bankruptcy", "judgment proof", "income garnishment", etc. Aside from this site, a lot of us have liked www.nolo.com (search for bankruptcy articles).

Here are a couple of links you might start with:

http://www.usdoj.gov/ust/eo/bapcpa/index.htm

http://www.ca-bankruptcy-attorneys.c...alculator.html

http://www.thebankruptcysite.org/

http://askmethner.com

So, like I said, to file or not - well, you will have to decide that, but by getting info now and helping your Dad take control now - you are doing the right thing.

[keepmine]

Let's make it simple. What state is you father in and, how much equity does he have in the house and the car?
It's important that you keep paying those student loans because, they'll survive his bk and if you default they'll look to him for payment.

[Jupiter8]

Thanks guys for all the help...

We live in Indiana. So I did some research and according to a site, Indiana has 15k (30k for couples) exempt equity in a house. Correct me if Im wrong, I interpret that as if we own less than 30k of the house, we get to keep it. Anything over, we would be forced to sell it.

My question then is if my dad (who is married and lives with my mom) files for himself, does that mean that we are at the 15k mark or the 30 mark because they live together?

With the student loans, I am going to continue to pay those down. I dont think theres any bk laws that can wipe those out.

[Jupiter8]

Let's make it simple. What state is you father in and, how much equity does he have in the house and the car?
It's important that you keep paying those student loans because, they'll survive his bk and if you default they'll look to him for payment.

We have around 30k in equity on the house (I will have to check for exact numbers) and we probably 3k on one car and 5k on another.

[DebtEnder]

Ok Indiana has some crappy exemptions and they do not allow federal ones.

here is where I am getting the info http://www.legalconsumer.com/bankrup...IN-KY#Personal

There is no specific exemption for cars just other property at only $300. They do have a large wildcard of 8k that can be applied to anything so at least one car can be protected. But the wildcard can only be applied once and I don't think you can use any leftover for a 2nd item.

Regarding the homestead I think it is 15,00 max. However if it secured in his name only and his wife lives with him it is fully protected. Property that is held as tenancy by the entirety: may be exempt if only one spouse incurred the debt. However the law is horribly written so if both file it may give a total of 30k.

Tbh unless your parents have some really nice furniture and nice electronics it's rare you even have to exempt household goods.

One thing I did see is he part owner in a business? As if he is the state allows 100% exemption of business asset in a partnership. About the only thing good that I can see.

This has to be about the worst state to file in

[Jupiter8]

Hmmm, after reading this and doing some research, I think filing a chapter 13 maybe the best option for us.

But I just want to understand your correctly. If we were to qualify for a chapter 7, the house would be protected since both my parents are living there? And atleast one of the cars would have to go?

[willbfree]

Jupiter8 do some research on what type of income is exempt from being seized by creditors. Social Security and most pensions are not eligible to be garnished to pay back debts. If Dad is getting close to retiring he may not have much in the way of monthly income that can be taken to pay back his debts. What assets you have equity (home, land, auto, boat, motorcycle etc) will be your area of focus. That's why my advice is to see a good bk atty who offers a free first consultation. A professional can advise you of all your options after looking over your financial situation.

[DebtEnder]

In Indiana it appears that unsecured creditors can place liens on property. I have come across a couple in my searching. Seems to be one of those very few that allow it.

As we already know there is some significant equity in the house. I would recommend calling an attorney who practices in the state and ask him if joint filing gives a 30k exemption and if each filer gets a wildcard so each can protect one car.

As I said before the state law is poorly written, one of the worst worded laws I've seen tbh.