Renting my home, but want to keep it in a 7

[indebtbad]

Hello everyone, lots of questions, hope I can get some help:

Current situation:
This is in Indianapolis.

I was unemployed for 8 months, did not draw unemployment, lived off of savings
Got a mortgage Hamp mod by not paying for six months, resigned at 2% max goes to 5%, I owe 97k, house is worth probably right at that. The payment is very comforable, but I rented the place out for six months to escape all the combined bills which are right around 800 per month (power, internet, water, etc) My renters pay me $850 so I come out ahead making 300 per month. Should I move back into the house or can I continue to rent it? I am pretty sure I want to keep it, will the BKK court allow me to do this? Or should I wait until I can move back in in June, then file while living there? I actually like not having to pay the mortgage right now as I am staying with a friend for free and accumulating savings again. I would like to continue this for another six months.

I owe 4.5k on the car it is worth around 7k

I just started a sales job last month with 30k base, but will probably make around 70k with comission coming in.

I have 55k of CC debt due to past biz loans, not consumer, long story on that one. I havent made a charge or a payment in 12 months.

If I filed next month I would have 4k in liquid cash in the bank. I dont have any assets of any real value, maybe 1k to 2k in appliances/furniture.

Any advice on timing/what to do about the house? That is my number one question. Even with what they pay I am under the six month median income req for my state.

[TheBajan]

I'm pretty new at this so please just take this as my opinion. From what you are saying, you just started this job and that means that your means test right now is below the medium. However, in six months, if you are making 70K, your means test may throw you out of a chapter 7 so be careful of waiting too long to file. Also, from what I was told and what I've read here, you don't want to have too much cash on hand before you file or it will be considered an asset. I filed a 13 and I know the rules are a bit different so keep that in mind. Hope that helps a little. I'm sorry I have no advice regarding the house. Hopefully someone else can answer that for you.
Best wishes,
The Bajan

[indebtbad]

yes, as of right now I am below the means test, but also not living in my home. In six months, life should be much much better, but I would like to take advantage of the opp I have to file chapter 7 BK before any big money starts rolling in. The proverbial "fresh start" that Bk is supposed to be. I am trying to be smart about it, but if I can keep renting the house and keep it as an asset, that is what I would choose to do. If I need to move back in at the end of May (that is when the lease is up) then that is what I will do. My renters want to sign another six month lease and I am happy to let them, but not if it is going to mess up my filing. Thanks for the advice though.

[davetedge]

I don't know how "assignment of rent" works in Indiana but the signed lease is an asset itself, and something that the bankruptcy trustee may value and take. I would move back in and file around the same time.

If you have any judgements against you, it might be good to limit the amount of money you keep in a bank since a creditor could levy the account. I assume the biz debt is either on your personal credit cards or personally guaranteed, otherwise it may not be worth filing at all.

[AngelinaCatHub]

indebtbad, you have a little complicated case. First, what is owed on the house? The house is an income, you must count that, but if you are residing with a "friend", to save money to make ends meet that could be as asset to you. I think a lawyer is in order. As far as "money rolling in", can you really count on that? Only figure in your base pay as you cannot count on finding that gold mine. 'Hub

[indebtbad]

Thanks guys. Yes, the business debt was on personal lines of credit, so I am accountable. It was basically a small business failure that brought me to this. It looks as if I would use the $850 a month they are paying me as part of my income, but I still think if I time it right I will be below the median. I also think I should get a lawyer, but this forum has invaluable opinions so here I am! lol.

Hub, I put the numbers on the house. I owe 97,000, it is either worth that or maybe a thousand or two under, not underwater bad at all but not much equity either. I would say it is a complete wash of what I owe vs what it is worth. My house is amazing for the payment I make, but it is also almost an hour from my new job so the gas is killing me along with my commute time. If that wasn't the case I would move back in ASAP.

[keepsmiling]

So.. to be clear... you got your mortgage mod, and yet still aren't paying the mortgage? and would like to continue to not pay for 6 months?
Or have you begun paying again?

Have you made any appointments with attys yet? If not, that should be the first order of business tomorrow. Make at least 3.

[keepmine]

If, the majority of the debt was non consumer {business debt} you're exempt from means testing.
You really need to seek out an experienced bk attorney on this one.

[indebtbad]

So.. to be clear... you got your mortgage mod, and yet still aren't paying the mortgage? and would like to continue to not pay for 6 months?
Or have you begun paying again?

Have you made any appointments with attys yet? If not, that should be the first order of business tomorrow. Make at least 3.

10

The mortgage is current. I got it modified from 9% interest to 2% (after not paying for six months, they decided to mod it and roll the back owed amount into it) dropped payment by over half. I could not get an apartment for what I pay for my house. My renters pay me $850, I use that money to pay the mortgage and come out $300 ahead every month. In indiana you can claim $8500 in wildcard exemptions, I am going to claim the equity in my car and whatever liquid cash I have. I do not have any fancy belongings, just normal 10 year old furniture and stuff.

Again, I would move back into the house ASAP, but it is far from my job. The renters have been there 3 months, I have been living with a friend for that time, the lease is six months. I started my new job 2 months ago, so that is all the money I have made in like 8 months (a few grand) Hopefully that is a better picture. When I lost the business (biz partner died, crazy I know) I had 9k in the bank, I used it to pay my bills for 8 months and didn't pay the credit cards or house, just the car and other necesities. When they forgave the back amount and modded I decided to keep the house. I didn't qualify for unemployment because I wasnt fired, so I had not choice but to live on savings and job hunt.

I was not "officially" on the books at this biz, we set it up and my partner died in an accident before we finalized paperwork, yes it was messy. Left me holding the bag for money owed and I was so shocked/depressed I didn't handle things right.

[ValleYum]

I was not "officially" on the books at this biz, we set it up and my partner died in an accident before we finalized paperwork, yes it was messy. Left me holding the bag for money owed and I was so shocked/depressed I didn't handle things right.

Wow I am really sorry. I think that your situation since it was "messy" will be a definite reason to speak with several attorneys so you can find the right one for you.

Indiana doesn't have a lot of exemptions for cash - you may have to spend it on exempt items so the Trustee doesn't take it. Again, a great attorney will make all the difference in what you do here *and* in how well you do here.

Best of luck.