341 meeing coming. Big question leaves open before it. Please help.

[scgtam]

Long story short, we have two properties. Me and my wife filling chp 7 jointly to get rid of the CC bills.

The house that we are living in, included in the mean test by laywer. Under My name.

Another house under my wife and her parents names. Not included in the mean test.

Lawyer said we are not reaffirming any properties. I understand the benefit of not reaffirming and is totally fine for my property.

The question is, what happen to my parents in law credit after our discharge?

I am sure my wife's credit will show discharge on their mortgage and that's fine. Will my parents in law's credit showing any negative at all? The credit union who service the loan discontiue the services due to the automatic stay. Will everything back to normal for our parents in law after our discharge?

I emailed and left a message to my lawyer but just want to get some answer and opinion before he reply.

Thanks

[tobee43]

is this income property???

what is the reasoning behind your lawyer stating you don't have to list this property?

i'm a bit concerned, only because we also owned other property with someone else, however, we had to allow them to buy our share out prior to our filing and we were suppose to have waited 2 years so we didn't have to list the property on our petition. however, since the property sold at a loss to the other party we did list, it was absolutely brought up at our 341 and we were questioned to the wall, however, had all the answers...thankfully. in our case, it would not have behoved the trustee to turn us into an asset case as the other owner had legal first rights to purchase our share,(with the aid of legal council), which would have happened at some point in time anyway, but we chose not to wait until the case was before the courts. that way there is not much they could have done to take the property away from the other party. (which was our main concern).

i know we had to mention the property on our petition as the deed changed hands within that magic 2 year number asking to list any and all properties that had any deed changes. we did list it as we were just shy under that 2 year mark but choice to hit the problem head on than have the trustee find out that we didn't list it.

it all worked out for us, but again, we listed the property.

best of luck!!

[scgtam]

My wife help her parents to finance the house at that time. Her parents live there and make the payment. It is definitely not an income property. Please help!

[tobee43]

My wife help her parents to finance the house at that time. Her parents live there and make the payment. It is definitely not an income property. Please help!

well, if they can prove they make the payments and always have, i can understand why the atty is not as worried. i didn't mean to worry you more! the property we had was income property, so it was very different, there were no family members that paid the mortgage and had proof of such. that may be why your atty is not concerned. however, i would make him/her make is perfectly clear as to why they do not view this as an issue and what is the likely outcome if the property is mentioned by the trustee??

[scgtam]

Thanks. Anyone else can chime in?

[SMinGA2]

Its not on your means test because you don't make a payment for it. It does not affect your finances. Now if the parents default, your wife will not be responsible for the payment.

Is there equity in the home that she owns with her parents?

[scgtam]

There won't be enough equity for the BK to force sale. But back to my question, will my parents law credit be impacted because of our BK? Will they able to remod the loan with the credit union without my wife names on it?

Thanks.

[tobee43]

one may not have to list it on their means test if one does not make payments on it, like a car with no payments, that one owns out right, it is and may still be considered an asset if there is equity in the house and her name is on it. i think it will really depend on how the atty is handling this.

[tobee43]

There won't be enough equity for the BK to force sale. But back to my question, will my parents law credit be impacted because of our BK? Will they able to remod the loan with the credit union without my wife names on it?

Thanks.

that question is very difficult to answer as it's not anyone here on the forum that can tell you what the banks will and will not accept or approve

it will solely depend on the lender and there simply is no answer anyone really can give you as it will or will not. do your inlaws have perfect credit? do they pay all their bills on time? why did they need a co-signer or put your wife's name on their house? i mean, these are the types of questions the lenders will ask beside looking at their credit worthiness and only then will you really know if they will be effected or not.

[scgtam]

that question is very difficult to answer as it's not anyone here on the forum that can tell you what the banks will and will not accept or approve

it will solely depend on the lender and there simply is no answer anyone really can give you as it will or will not. do your inlaws have perfect credit? do they pay all their bills on time? why did they need a co-signer or put your wife's name on their house? i mean, these are the types of questions the lenders will ask beside looking at their credit worthiness and only then will you really know if they will be effected or not.

I understand the difficulty of my question and I am not looking for a definite answer. Anyway, my in law income was not sufficient at the time of the financing, therefore the help from my wife. They pay the mortgage on time every month, never late and have perfect credit.

I have contacted the credit union lawyer for some answers as well and haven't gotten a respond yet.

Thanks.

[tobee43]

I understand the difficulty of my question and I am not looking for a definite answer. Anyway, my in law income was not sufficient at the time of the financing, therefore the help from my wife. They pay the mortgage on time every month, never late and have perfect credit.

I have contacted the credit union lawyer for some answers as well and haven't gotten a respond yet.

Thanks.

i'm sure it will be alright. i can understand your concern, but i'm certain you'll be put at ease after you speak with your atty.

best of luck!

[scgtam]

Thanks for all the help. I am thinking after our discharge, my wife will be off the hook on her parents' loan. Her parents always pay ontime and I would assum the credit union would work out something to them only after the discharge.

[LadyInTheRed]

The bankruptcy should not appear on your parents' credit report. They should keep an eye on their reports and dispute any mention of your bankruptcy. It is possible that your parents will have to show they qualify for the loan on their own credit or find a new cosigner. I know of one case where a co-signor died and the lender was going to accellerate the loan if a satisfactory replacement cosingor was not found. The terms of the loan allowed such an accelleration.

[tobee43]

The bankruptcy should not appear on your parents' credit report. They should keep an eye on their reports and dispute any mention of your bankruptcy. It is possible that your parents will have to show they qualify for the loan on their own credit or find a new cosigner. I know of one case where a co-signor died and the lender was going to accellerate the loan if a satisfactory replacement cosingor was not found. The terms of the loan allowed such an accelleration.

one would think right??? with these banks now a days one would think the bank would just be happy enough having someone pay the mortgage on time. as you mentioned these clauses in the mortgage, which may trigger the acceleration of the loan hopefully would not happen, just the mere fact it can scares me!

[btbeme]

If your wife appears on the title of the home it might - MIGHT - become a target for creditors who might - MIGHT - grasp at straws and try to attach a lien. While they would not have any legal means to do so, unraveling the lien is sometimes about as easy as putting the toothpaste back in the tube. However, I'd say that the chances are slim that there would be any trouble. It is easy to show that your wife is there solely for qualifying for the loan and has no fiscal responsibility. As LIR says above, there is also a chance that the bank will not take kindly to the BK and might ask to recast the loan and title...but generally banks are content to just get their check on time every month.

Is the property in the same state? Also...have your in-laws filed for a homestead? An out-of-state property, and/or one with a homestead filed on it make it much less likely that a Trustee will find it to be a worthwhile a$$et to pursue, especially in this housing market. Just an opinion.

As far as their credit is concerned, if anything does ding them it would be something fairly easy to reverse, since the BK is not theirs.