Need to get some opinions..Please Help..

[jessegirl]

Hi, my parents went to go see an attorney and was told that they have too much to file a 7 and a 13. They live in a co-op and have no mortgage. There house is worth anywheres between 70K - 85K. They make under 30K combined. They have about 47K in cc debt. No cash advances, This attorney told us that they will make my parents sell there house. NOW, thats not good, cause where the hell are they going to go? I thought that BK was suppose to make you have a fresh start. They are over 75 years old. Have never ever been late on anything. They called Novadebt and they told them they can't help them unless they can come up with an extra 500.00 bucks a month. HAHA if they could they wouldn't be calling them. He told them to stopped paying the CC's, but then the calls will start and keep coming and then they will file suits against them right?

Damn cc cards so bad.....Chase raised there minimal payment from 80 to 350.00. Capital one raised there interest rate more then triple. They can't afford the payments and can't file... I thought that maybe if they couldn't file a 7 then a 13, but the attorney says they make to little. They were paying about 750.00 a month for cc's, but they can't fund a 13???

What do they do? Anyone? They live in NJ. They are really in a bad spot..

[OhioFiler]

Why can't they file a Chapter 13? I'd talk with more attorneys.

[jessegirl]

This is the second attorney. They both say that if they do a 7, the trustee will take the house and they don't make enough to do a 13? WTF....

The house is worth about 70K-85K - house is paid in off.
CC total about 46K
combined salaries of both approx. 27K

On attorney told him to seel there house and rent an apartment!! They are over 75 years old. They are in no shape to be moving. So thats not an option.

I thought a chapter 13 would work, but so far 2 attornies say no.
What do they do?

[keepmine]

Problem is, a unsecured creditor in a Chapter 13 can't get less than they'd have received in a Chapter 7. NJ apparently uses the Fed. homestead exemption which is $20,200. Not sure if that is doubled for a joint filing.
They'd essentially be in a 100% payback.
I see 2 options. Sell the house and put the funds in something that can't be attached by creditors.
Or, check NJ law and see if an unsecured creditor can actually place a lein and force a sale.

[OhioFiler]

Problem is, a unsecured creditor in a Chapter 13 can't get less than they'd have received in a Chapter 7. NJ apparently uses the Fed. homestead exemption which is $20,200. Not sure if that is doubled for a joint filing.
They'd essentially be in a 100% payback.
I see 2 options. Sell the house and put the funds in something that can't be attached by creditors.
Or, check NJ law and see if an unsecured creditor can actually place a lein and force a sale.

I agree. They may be judgement proof. I assume their incomes are not available for garnishment. i'd hide whatever funds I have out of site and tell the cc companies to pound sand.

Besides, no one is going to force 2 75 year olds out on the street because they didn't pay a few credit cards. I'd have the local media all over that if someone tried.

[goingcrzy]

Are they allowed to do a reverse mortgage on the Co-Op (it might be against co-op rules). Since the co-op would then belong to the bank, I wonder if they would qualify?

I have no idea on this -just brainstorming

[music12]

whatever you do, DO NOT let them give up the house or sell it!!! that would be insane and could end up leaving them right on the streets. so whatever you do, just not that. they'd be selling their home to pay unsecured debt. just don't do it. even if you find that NJ law allows a creditor to force a sale, which I think is unlikely to happen (though i haven't checked), it would be crazy to do that voluntarily.

all i know is that if someone gets a judgment against them, they can probably file it to get a lien against their real estate (their home). that would mean that IF they sell it, the creditor gets part of the proceeds. I think it's very rare that a judgment creditor can actually force a sale.

is their 27,000 income exempt? is it social security?

[jessegirl]

whatever you do, DO NOT let them give up the house or sell it!!! that would be insane and could end up leaving them right on the streets. so whatever you do, just not that. they'd be selling their home to pay unsecured debt. just don't do it. even if you find that NJ law allows a creditor to force a sale, which I think is unlikely to happen (though i haven't checked), it would be crazy to do that voluntarily.

all i know is that if someone gets a judgment against them, they can probably file it to get a lien against their real estate (their home). that would mean that IF they sell it, the creditor gets part of the proceeds. I think it's very rare that a judgment creditor can actually force a sale.

is their 27,000 income exempt? is it social security?

Most of it is SS and about 200 is pension. The co-op does not allow equity loans.

I feel so bad for them cause it is making them sick. I told them to stop paying there cc's, but to tell a 75 year who has never been late ever, but then they say what happens if they put a judgement against us and we have to go to court. I am not sure that they will hold up in court. They already knew that they would have to go to a 341. But court, would be trouble.

I told the lawyer, would a trustee make them sell there house, he says yes, i said and then where would they go, he says it doesn't matter. My answer back to him was, I thought BK was suppose to make you have a fresh start, not put you in a worse perdicamenet...

I thought that NJ has a 20250.00 homestead exemption and they can double that if they are a couple. That would make 40500.00. The attorney says no its only 35000.00. Not sure where he got his figure. I also asked about the 10,000.00 wild card. He told me you cannot use that in a 13 or a 7. I thought you could.

What a bad way they are in......

[OhioFiler]

They should get a new phone number and a po box so they can avoid the hassles. I would force the lenders to come after me if I were in their shoes. So what if they attach a lien to their home. So long as they stay there it means nothing.

You need to make them see it's okay to not pay those debts. I'm sure it's hard for them to accept that notion but they can be made to understand if you spell it out clear enough.

Good luck!

[aces67]

Most of it is SS and about 200 is pension. The co-op does not allow equity loans.

I feel so bad for them cause it is making them sick. I told them to stop paying there cc's, but to tell a 75 year who has never been late ever, but then they say what happens if they put a judgement against us and we have to go to court. I am not sure that they will hold up in court. They already knew that they would have to go to a 341. But court, would be trouble.

I told the lawyer, would a trustee make them sell there house, he says yes, i said and then where would they go, he says it doesn't matter. My answer back to him was, I thought BK was suppose to make you have a fresh start, not put you in a worse perdicamenet...

I thought that NJ has a 20250.00 homestead exemption and they can double that if they are a couple. That would make 40500.00. The attorney says no its only 35000.00. Not sure where he got his figure. I also asked about the 10,000.00 wild card. He told me you cannot use that in a 13 or a 7. I thought you could.

What a bad way they are in......

Maybe you guys should see a third lawyer. They should be able to use the wildcard exemption to help them out.

Are you positive about the value of their home?

[music12]

can someone chime in and explain why the $125,000 homestead exemption doesn't apply? I am talking about 11 usc 522(p)

[keepmine]

The $125K isn't really an exemption in the sense you're thinking about.
It means, if you buy a house within 1215 days of filing bk your equity exemption is limited to $125K. This was done to prevent forum shopping-moving to Fl. or Tx. that has an unlimited homestead exemption and putting hundreds of thousand of dolars into a home and then filing bk.

[Rick9972]

BK 11 anyone?????

[whipster1]

Yikes, don't see that NJ has a homestead exemption...stuck with Federal.

[AngelinaCatHub]

Jessiegirl: Good to see you again, but not under this circumstance.

Let us look at this in a practical way. This bk could literally kill them. Others have stated to change the P. O. Box and phone number. I agree.

Now, you MUST convince them of abandoning the debt. I know, they are old tyme and so was my Mother until she could not cope without feeding her 67 cats on $460 a month S.S. and pay her CC's too. (You figure. Old people?).

OK, I now qualify as "Old People" so here is my advice. Help them all you can. I don't know your own circumstances but I know you from here. Get food stamps for them, become their custodial representative, (Durable Power of Attorney). Then go to the County about abating property taxes. That is, if they do not have a tax exclusion as we do in FL. Make sure they are fed with something like Angelfoodministries.com, and meals on wheels. If and when the suits come, explain to those who may be suing, that you will take their story to the news media.

Let me tell you a short story (I've done this boring thing before). My Mother with a perfect credit score all her life, wrote two heart wrenching hand written letters to two CC companies. She wrote to the main office, I do not know where. She stated her age, condition and history is a near tear jerking letter. She stated that she could no longer pay. From that date, she never received another bill. I cannot tell you that this would work today as that was in 1997.

First and foremost, take any strain off the parents. You are much more knowledgeable than they are in this area. Divert any calls to you or your address. Perhaps, and I do not mean to be rude here, talk to a Judge to have them declared not competent, but able to conduct normal life style. Let the law work for us for a change.

This is my best shot, and I hope it helps you a bit. I wish I could do more. 'Hub