DEBT! what should i do debt consolidation,debt settlement bankruptcy (kind of long)

[keepmine]

thanks Ohio for the quick response, now what if i sold the house for what is owed to him ? would there be a problem with the BK with that? thanks again

The important question is, what is the fai market value? If you sell it below mkt value, that raises a insider transaction issue if you didn't get what it was worth. It means, you left money on the table that could have been used to pay your other creditors. In other words, a family member was enriched at the expense of other creditors.
If that happens, the trustee has the authority to unwind the transaction.
I'd just be cautious of involving friends and family in my bk.

[woeisme]

thanks Ohio for the quick response, now what if i sold the house for what is owed to him ? would there be a problem with the BK with that? thanks again

Depends on whether "what is owed" is fair market value or not. If the house is worth $200,000, and what is owed is $100,000, then a HUGE problem because you are basically giving away the equity that the trustee is going to say belongs to the BK estate. If, however, you owe $200,000 and that is what the house is worth, not a problem, but be prepared to prove that there is no equity being gifted away here.

You know if you are up to date on payments, you don't have to give up your home in a CH 7, and even if not up to date, don't have to give up your home in a CH 13. Talk to a lawyer, because I'm not sure what the situation is since you aren't living there, but you might be able to keep house through the BK and then afterwards, if you want to still get rid of it (was confused by what you were saying about what Dad paid and what you paid, not sure if he was renting for less than your mortgage payment) then you could sell it after the BK goes through. Like I said, not 100% positive you can keep it because you aren't living there, but is a possibility, ask your lawyer. And your car shouldn't be a problem as long as again, you don't have a bundle of un-exempted equity in it.

Good luck!

[CCA1984]

OP, be very careful when you sell your house. The look back period for the sale of real estate is a long one: up to TEN YEARS. The look back for insiders is one year. Your father is an insider and if you sell to him for less than fair market value, the Trustee can avoid the transfer.

Do you have any equity in the house or is it upside down? The Trustee will be interested if there is equity...not so much if you are upside down. But you will need to show the values.

Startingover08, thank you for the response. I had a coouple questions for you. if the property is worth what is owed would there be any problem? With the property, if i transferred it to him first then in a few months start the BK process, would there be a problem? Pretty much i want my dad to be able to live in a place where he has for a while now and dont want him to lose anything or have to move. the property and whats owed on it is right around the same. what would u recommend or say you think i might be able to do ( and not professional advice) but thank you it truly means alot to me

[CCA1984]

In addition to what Jim said, not only they teach these debtors to go past 90 days, they also want upfront fees and certain number of monthly fees so that their arbitrators can negotiate with the creditors. Yeah right. However, from my experience with a debt settlement company, I discovered the arbitrators there actually let the creditors make offers and then the debtor would receive letters of offer directly from the creditor (s) and not through the debt settlement company. Jim is also correct that a debt settlement company works very similar to being in a chapter 13 but these settlements being in lump sum or a couple of months payments to the creditors. To the OP, whichever avenue you choose for taking care of your debt, I wish you the best..just stay away from DSCs (debt settlement companies)

will do forum i appreciate it big time. Dsc's can go away, i'd rather do the BK just to start fresh. thank you again

[CCA1984]

The important question is, what is the fai market value? If you sell it below mkt value, that raises a insider transaction issue if you didn't get what it was worth. It means, you left money on the table that could have been used to pay your other creditors. In other words, a family member was enriched at the expense of other creditors.
If that happens, the trustee has the authority to unwind the transaction.
I'd just be cautious of involving friends and family in my bk.

Thanks keepmine, I understand what you mean. and dont want to get anyone in trouble. and i am sorry if this sounds like a stupid question, what do you mean by trustee? again sorry if that sounds idiotic. I'm trying to get all my info straight so when i go to file I want to make sure everything goes smooth. Thank you again

[CCA1984]

Depends on whether "what is owed" is fair market value or not. If the house is worth $200,000, and what is owed is $100,000, then a HUGE problem because you are basically giving away the equity that the trustee is going to say belongs to the BK estate. If, however, you owe $200,000 and that is what the house is worth, not a problem, but be prepared to prove that there is no equity being gifted away here.

You know if you are up to date on payments, you don't have to give up your home in a CH 7, and even if not up to date, don't have to give up your home in a CH 13. Talk to a lawyer, because I'm not sure what the situation is since you aren't living there, but you might be able to keep house through the BK and then afterwards, if you want to still get rid of it (was confused by what you were saying about what Dad paid and what you paid, not sure if he was renting for less than your mortgage payment) then you could sell it after the BK goes through. Like I said, not 100% positive you can keep it because you aren't living there, but is a possibility, ask your lawyer. And your car shouldn't be a problem as long as again, you don't have a bundle of un-exempted equity in it.

Good luck!

Thank you woeisme, So more or less it depends on the equity and if there is any in the house. And sorry for any confusion, to clear that up . The payment on the house is 1400$ , my dad pays 1150$ of it i pay 250$ the rest. i'd rather keep everything in my name and the house especially, Now with my car ( i owe $12k on it) would i be able to include that into my BK but still be able to keep it ? i did a KBB.com just to see the value and its right around what I owe. i can't tell you enough thank you for the help and it is greatly appreciated, anymore advice would be great thank you again big time

[CCA1984]

woeisme, i also saw you ch13 in your sig. if you dont mind how did it go for ? was it worth it? hope that doesnt sound too personal, just want to get all opinions. thank you again

[keepmine]

Thanks keepmine, I understand what you mean. and dont want to get anyone in trouble. and i am sorry if this sounds like a stupid question, what do you mean by trustee? again sorry if that sounds idiotic. I'm trying to get all my info straight so when i go to file I want to make sure everything goes smooth. Thank you again

The trustee is appointed by the bk court to oversee your bk. There job is to represent the interest of your creditors.
You keep dancing around one particular question. What is the home worth in relation to the amount left on the mortgage? Until you answer that, this is just going to a thread to nowhere.

[CCA1984]

The trustee is appointed by the bk court to oversee your bk. There job is to represent the interest of your creditors.
You keep dancing around one particular question. What is the home worth in relation to the amount left on the mortgage? Until you answer that, this is just going to a thread to nowhere.

I am sorry about that, I owe right around 148k on the house and it is worth right around maybe 155K. thank you for the information regarding the trustee appreciate it. That why i was thinking of maybe selling it to my dad for what is owed on it. again i apologize for the confusion on my part and thank you for your help

[RBisDebtFree]

I think you have $125k homestead exemption, basically, equity in your house up to $125k is exempt. But you are probably going to have to take Federal exemptions as you're filing in CA and they don't have state exemptions. Federal homestead exemption is $20k which is still enough to cover your equity. However, with $7k in equity, I don't think any trustee would even bother, it'll probably cost more than that to sell your house...

Also, if you sell, do you think your dad will be able to obtain a loan? (Assuming he's not buying with cash). Also, if you keep it in your name and have to get rid of the house later, defaulting on it might not be an option as the mortgage will know you have filed and can't file again within the next 8 years. Same with the car. Just FYI, hope it helps!

[StartingOver08]

Do NOT transfer the house to your Dad before filing. Given your post, it sounds like you can keep the house anyway (with a ride thru on the mortgage). We certainly don't have all the information, but transferring your house to your Father just before BK will get the Trustee's attention. Since there is very little equity and all of the equity that is there can be exempted, just exempt it. JMHO. Have at least a CMA for the value of your home to show you do not have much equity.

[CCA1984]

I think you have $125k homestead exemption, basically, equity in your house up to $125k is exempt. But you are probably going to have to take Federal exemptions as you're filing in CA and they don't have state exemptions. Federal homestead exemption is $20k which is still enough to cover your equity. However, with $7k in equity, I don't think any trustee would even bother, it'll probably cost more than that to sell your house...

Also, if you sell, do you think your dad will be able to obtain a loan? (Assuming he's not buying with cash). Also, if you keep it in your name and have to get rid of the house later, defaulting on it might not be an option as the mortgage will know you have filed and can't file again within the next 8 years. Same with the car. Just FYI, hope it helps!

Thank you for the input, and just want to make sure i'm understanding this. If the house was worth up to say 165k and i owe 148k i would still be able to keep the house i would just claim exempt? my dad would be able to obtain the loan, but from the posts i have receive ( which are great thank you) it seems like a should be able to keep my house. now another quesion for you, given with the amount thats owed 148k, what would be the total amount i could have in equity and still be able to keep it and not hav the trustee's come after it? thanks again to everyone

[CCA1984]

Do NOT transfer the house to your Dad before filing. Given your post, it sounds like you can keep the house anyway (with a ride thru on the mortgage). We certainly don't have all the information, but transferring your house to your Father just before BK will get the Trustee's attention. Since there is very little equity and all of the equity that is there can be exempted, just exempt it. JMHO. Have at least a CMA for the value of your home to show you do not have much equity.

Thanks Startingover, i cant tell you enough how much this means to me, now im going to probably start my case in the beginning of the year, what are the process or the steps. I have read about first filing,then the 341 and objections then finally discharge. if anyone has some steps or can break it down for me. ( sorry if that sounds too much, just wanna make sure i got my stuff together) thanks again

[woeisme]

Thank you woeisme, So more or less it depends on the equity and if there is any in the house. And sorry for any confusion, to clear that up . The payment on the house is 1400$ , my dad pays 1150$ of it i pay 250$ the rest. i'd rather keep everything in my name and the house especially, Now with my car ( i owe $12k on it) would i be able to include that into my BK but still be able to keep it ? i did a KBB.com just to see the value and its right around what I owe. i can't tell you enough thank you for the help and it is greatly appreciated, anymore advice would be great thank you again big time

Yes, I think you should also be able to keep your car. As for my CH 13, it's going ok. has it's ups and downs. I'm a little over 2 years into it, and have almost 3 years to go. It definitely helped improve our financial situation, but not an easy adjustment for a gal who was totally hooked to her credit card! I'm really glad we filed tho, was the best financial decision I ever made (of course that ain't saying much!). I am so much better about budgeting and saving now, it's not even funny!

[CCA1984]

Yes, I think you should also be able to keep your car. As for my CH 13, it's going ok. has it's ups and downs. I'm a little over 2 years into it, and have almost 3 years to go. It definitely helped improve our financial situation, but not an easy adjustment for a gal who was totally hooked to her credit card! I'm really glad we filed tho, was the best financial decision I ever made (of course that ain't saying much!). I am so much better about budgeting and saving now, it's not even funny!

OK, i appreciate the help big time, truly helps me out alot thank you again. Now based with my situation do you think i would qualify for ch 7 or ch 13 ? and with the house, i owe right around 148k will the BK/ creditors get it appraised? or would i just tell them the amount its worth? sorry if that sounds stupid and sorry for all the questions. thank you again i truly appreciate it