Any risk of "preferential treatment to creditor" on doing that? We canceled all of our credit card autodrafts this week, and received a "gift" (not a loan completely voluntary if we ever want to return the favor) from the in-laws to help finish the arrears off completely. Any trouble brewing in those statements?
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I think that the gift could be, especially if it is a significant amount. We did have two creditors that we paid over 600 bucks prior to filing but it was for our home and our car so our trustee didn't say anything about that. But, if you want to keep your house, maybe your mortgage company would work with you on what you are behind on it. My friend's mortgage company wrapped her's to the end of their loan so they could start fresh. Just a thought. Good luck! -
Secured debt is treated differently than unsecured debt when considering "preferential payments." Bringing your mortgage current should not be a problem. However, the "gift" from the in-laws could be considered income, so keep that in mind for the 6-month look-back. It might be better if the in-laws paid your arrears directly to the bank so that it never touches your hands...Filed Chapter 13 on 2-28-10. 341 completed 4/14/10. Confirmed 5/14/10. Lien strip granted 2/2/11
0% payback to unsecured creditors, 56 payments down, 4 to go....Comment
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Potential issue: the gift (depending on the amount & your 6 mo look back on income) could put you over median on the means test.
If you have not yet cashed the check, give it back to them. Discuss w/ your attorney ASAP and perhaps give them payment address & account # and allow them to make the payment directly to your mortgage company.Get mortgage modified: DONE! 7 months of back interest payments amortized, payment reduced over $200/mo
(In the 'planning' stage, to file ch. 13 if/when we have to.)Comment
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Could them paying on their behalf be considered income since it paid their bills and it didn't come from their paychecks? That would be my concern. I'd ask the attorney and I'm curious what they say.Comment
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They did pay it directly to the mortgage company without it touching our hands. We are in no major rush to file as we just stopped paying our CC's. My income is dropping by the day and probably will not stabilize until next spring (and that is being optimistic) so we are holding out a while so the "snapshot" is a true representation of where we are at. I work for my fathers business and while helpful at the time, he overpaid me the first 3 months of the year and took less himself. This put us right above the median, but if I was taking my actual pay the last 6 months, we would be 5-7k under median. Obviously we were not trying to claim bankruptcy, just survive. Unfortunately, there really is no other way out of this mess now. Typical story; combined income was 120k a year in 2007, bought a nice expensive house and had only 4-5k in consumer credit debt. Wife and I are in real estate related fields and within 6 months of moving in, the bottom fell out. Used CC's to bridge the gap hoping it would recover somewhat quickly but just never did. Combined income now is around 70k, and cc debt almost 50k (wife ended up out of work for 6 months which coincided with my slow period over the winter). Tripled interest rates on almost all cards and tidal wave is looming over our heads. It sure can change quick huh?Comment
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