Retiring Bankrupt.

[BobChowdury]

My father-in-law is 72 and still working.
He grosses 45,000 a year + 13,000 in social security.
He has a car worth 4,000
A house with 120,000 in equity
A rental propert with 20,000 in equity.
No IRAs, No 401ks, no savings.
He has 75,000 in credit card debt and 5,000 in a personal loan
He currently is spending 1200 a year more than he brings in.
He isn't likely to be working for much longer.

Is he a candidate for chapter 7?
Should I take him to see a bankrupsy lawyer?
Can he claim bankrupsy and save the house?

thanks
Bob

[music12]

he is clearly a candidate for ch7. however, even then he would have to figure out how not to spend more than comes in. otherwise, he'll get into bk again.

you'll have to check your state's bk exemptions and whether he can pay the mortgage on time to see if the house can be saved.

[SMinGA]

The answer, unfortunately, is 'it depends'. On what state he lives in to determine which assets he can exempt.

[BobChowdury]

Thanks. We're in CT. I'm gonna take hime to a lawyer. We already have the worksheet filled out so that should save a bit of the lawyer's time. I think a lot of his expenses is paying the minimum on his credit cards.

[SMinGA]

At a glance, it looks like CT allows $75,000 home equity & $3,500 for a vehicle.

If your father is the sole owner of the house, that may be a problem. If there is another on title with him, he only owns half the equity and should be ok. Of course, it depends on how accurate your estimate is. Looks like he is close on the car. Probably nothing to worry about there as used vehicles continue to depreciate as the months go by.

[BobChowdury]

Thnx
Yes he and his wife own the house.

[sawdust14]

This is really weird! Your father's situation is almost identical to ours. About the same income, SS, home value, unsecured debt, etc. The only difference is we are about 8 years younger and we don't have a rental property. We filed last December, CH 7, and are now discharged and closed. No Problems!

As the earlier post indicated, how things work out will depend on your state's homestead exemption. In Iowa we have a 100% exemption.

Another potential problem is the Social Security income and how the trustee looks at it in your district. It is not counted in the means test, but it is counted when calculating disposible income. We had a plus $481 in disposible income with the SS but the trustee said nothing. Our attorney said this was standard practice in our district when SS income is involved and you are under the median income. Good Luck

[BobChowdury]

Thanks for the advice.