just starting out

[annalynn]

I came to my senses over the weekend--and have decided to file for a Chapter 7. Even though I have a lot to do--I feel relieved--and actually happy now that I have made the decision.

My situation is that I have been unemployed since July 2008. Even before unemployment, I was struggling with my bills---major hospital bills for the most part. Unemployment has kept me afloat for the past two years--as well as cashing out every bit of my retirement funds

Now the unemployment has run out--and the other funds too---and I have no way to juggle anymore.

My assets:
I "own" a home--but have no equity in it. My family had purchased the home as an investment--they sold it to me and are carrying the paper. I used a second mortgage for the downpayment. Total owed--152,000--home is currently worth 149,000. I am in a fortunate postion--as a family member holds the paper on my loan. We have an agreement that I will start paying on the loan as soon as I am employed and that the missed payments will simply be added on to the end of the loan--so I am not in any trouble there.

I own my car outright--it is ten years old with over 100,000 miles on it. It was completely totaled in an accident around 5 years ago. Since the accident, it shimmies and shakes when it goes over 50 mph. It also has a cracked windshield, a few dents on the outside, and some stains in the interior.

My household items--furniture, clothing etc should all be exempt--I have nothing that would currently bring more than a few hundred dollars in resale.

I have between 40 and 50 K worth of bills (credit card debt and medical) that I need to get rid of--and with absolutely no income I am desperate.

If I can file and keep my home, my car and my personal things--while getting rid of this crushing debt--I will be extremely happy. I do have many questions--but am going to read for a bit---that may answer some of them.

[ccsjoe]

I'm hoping somebody else will chime in here, however, from what you've said, you're pretty much collection proof at this point. I would hold off on filing until you do find a source of income. Right now they can get any judgement they want against you but have no way to collect on it. What's going to happen with new bills once you file and still have no source of income to cover them? You can only file once every 8 years. Once you have a source of income, then by all means file, you have something to protect and to keep you solvent going forward.

Just my random thoughts

Good luck.

[kartoons19]

I agree with CCSJoe. Filing can help unload the debt, but it won't help with the lack of income. I think it may be best to wait until you have some income and then meet with an attorney (usually free) to see if filing is right for you. Good luck.

[annalynn]

thanks--that is good advice--wish I could find something :-(

it is very tough right now!

[annalynn]

I was looking in to taking the H&R Block course and doing taxes Jan-April. With my simple lifestyle--and the elimination of my unsecured debt---this may net me enough to last all year (at least until the economy picks up and I can get a real job).

BUT--I am concerned---will having a BK on my record mean that I can't be a tax preparer? I know that most jobs don't care--but it seems that in the financial world this can be looked on as a black mark...does anyone know?

[kartoons19]

I was going to work for another tax company and they never did a background check, although at the time it wouldn't have been a problem. If you hold off on filing until after you get the job, then it would be less likely to be an issue. They would probably hire you sooner than January since there is training involved. Anyway, I'm not sure about H&R Block's policy. Maybe someone else will have an answer.

[annalynn]

I figure taxes are reasonably recession proof--although it is seasonal work. Anything would help though!

[tcreegan]

Hello and welcome annalyn,

If I can file and keep my home, my car and my personal things--while getting rid of this crushing debt

maybe, yes, yes, and yes

The house depends on the family that sold it to you. If they are willing, they can "reaffirm" the loan (basically re-sign the loan paper) Or they can take the house back in the BK, continue to let you live there no charge until you get a job, then resell the house to you.

Of course you have the problem of the second mortgage....

I agree w/ the previous posters saying to wait until you get some income before filing.

Good luck with it all,

Tom in Colo

[momofthree]

My main concern would be how is the house titled, and did they file a mortgage lien against it? If they didn't perfect the lien, then the trustee will see that you have a free-and-clear house, and take it from you to pay off your creditors. I'd certainly go down to a local title company and verify that your family are in-fact listed on there in 1st position.

[Pandora]

My main concern would be how is the house titled, and did they file a mortgage lien against it? If they didn't perfect the lien, then the trustee will see that you have a free-and-clear house, and take it from you to pay off your creditors. I'd certainly go down to a local title company and verify that your family are in-fact listed on there in 1st position.

+1 on momofthree's concern as well as:

You say your family "holds the paper" - so I'm assuming and reading that as they are on the original note? Are you? If you're holding a 2nd mortgage, then for you to have taken that out, your name has to be on the title somewhere else they wouldn't of been able to provide the 2nd mortgage and put the lien.

[tobee43]

Originally Posted by momofthree
My main concern would be how is the house titled, and did they file a mortgage lien against it? If they didn't perfect the lien, then the trustee will see that you have a free-and-clear house, and take it from you to pay off your creditors. I'd certainly go down to a local title company and verify that your family are in-fact listed on there in 1st position.

also check the deed...see how it reads...is your name on it? that could cause issues as well.

[annalynn]

it was all done through a title company. (both the mortgage and the second), so it should be OK. The property is currently encumbered for approximately 3,000 more than it is currently worth. I also filled out the forms for the "Homestead" agreement and had them notarized--so I feel pretty confident that whatever interest I have in the place is protected.

The relative that bought the property does a lot of real estate transactions (owns 3 other properties in this development) so he is very business-like. It was not an informal transaction between us.

But--better safe than sorry.

I will make sure to show the papers to the BK attorney--but I have an actual mortgage--I do NOT have clear title to a home.

(although fortunately, I owe the money to a family member and they are being kind about the payments until I get a job). I think that moving payments to the end of the loan for someone who is in financial trouble is not too uncommon, but I do know that I am fortunate.

[tobee43]

i know when we filed we did have to provide a copy of the property deed since we were naming it in the bankrupcy. so it's just good to have a copy for your records, just in case it's asked for.

[annalynn]

how do I get a copy of the deed? I looked through my records and that is something I do not have.

[ccsjoe]

You can search at your county clerk's office. It will have a charge associated with it, but if anything was recorded regardig the property, that's where it will be for sure.

Actually, look at the county assessor's office for the address and APN information. It should, depending on your county, provide the address for notice deliveries, which is usually same as owner on title.