Situation is getting bad, what to do?

[dleeodyssey]

First of all, I just registered and wanted to thank you all for your advice.

Here is my situation.

I am a married man with 3 kids and the only one working.
I make about 56K a year.

I own 1 rental property with just money to cover the mortgage from the renter. The loan is about $160K.

I co-signed for my parents house with their names on the loan as well and they are the ones making the payments. That loan is about $250K.

My primary house has my name on it only with out the wife. First mortgage has about $265K and 2nd mortgage has $110K on it.

I currently owe about 50K+ in credit cards and just recently bought a new car with the payments at about $600.

As you can see, I'm drowning in debt and need help.

My question is if I file, will I make my parents house get sold and what about my current house or my rental. Also, I have 3 other cars that are fully paid off. Will those get taken away also?

I can pay for my mortgage and new car but it's the credit cards that I am drowning in.

HELP!

[JollyGG]

Is there equity in any of the three houses?

[dleeodyssey]

Im in California so there is absolutely no equity in any of the houses.

I'm actually under in my primary house because the same size house is going for about $200K in my neighborhood.

[leftyf]

Here is my advice, but this may be too harsh:

1) Walk away from your house. Your parents may need to do the same.
Get apartments. You may even have to dump the rental property. No point in keeping properties with no equity, IMHO.
2) Turn the new car back in (not sure here, maybe you should sell one or two of the old ones.)
3) Try to exempt (based on CA limits) the any remaining cars. Go down to 2 if necessary.
4) Try to avoid using credit cards for 6 months at least. See if you can get a balanced household budget.
4) File chapter 7 and start over.

It doesn't seem like you really have anything to protect that would justify the chapter 13 and your debt is way too high relative to your income. Can anyone else in the household get a job?

FYI, I don't really know anything about BK except what I have experienced with my filing and discharge and what I have read on the boards.

Good luck,
Lefty

[keepmine]

I agree with Lefty. SInce your parents are making the loan payments on their home, let them make the call on that but you, should let it all go and reload.
Thing is, you're supporting a family on $56K in a state with a high cost of living. Be sure you can balance the family budget before you file.

[Cali]

I am in CA too, and I don't see how you are making it on 56k a year income.

I would let it all go and start over. A true fresh start.

[AngelinaCat]

Can your parents assume payments on their home on their own? Since you co-signed, perhaps not. But I would get your name off that co-signed note. Something similar bit us in the seat. Also if you have your name on anyone's bank account that is really NOT yours, get your name OFF of it. However, you will probably have to weather a year-long look-back.

This is the time now to start planning. Read this forum, and get a plan. Don't panic now, but get educated. That is your best option.

My best~~~

[dleeodyssey]

If I file for Chapter 7, will they take the house my parents are paying for since I don't think telling them to move is an option.

I dont care about my primary residence or my other rental property since it doesn't generate any monthly income and is just a headache sometimes.

[keepmine]

Are you on the deed with your parents?

[dleeodyssey]

Yeah, both my parents and my name are on the deed right now.

Awhile back I was going to do a grant deed to them but then I was still on the loan so that didn't really mean much to me in terms of credit so I just left my name on the deed.

But they are 100% paying for it only and I have nothing to do w/ the house. Just that my name is on the loan.

[AngelinaCatHub]

dleeodyssey

If I file for Chapter 7, will they take the house my parents are paying for since I don't think telling them to move is an option.

I dont care about my primary residence or my other rental property since it doesn't generate any monthly income and is just a headache sometimes.

dleeodyssey, friend: We learned this the HARD way. We did not have our names on a house mortgage or deed, but we had our names on a bank account belonging to our 'god-daughter', for the one time purpose only of cashing ONE check. We should have had her remove our names after that check was cashed, but then she would have had to close that account and start all over.

.......Now, as I read here and in the Nolo C7 book, the Trustee has every right to claim that account, because by LAW, it is considered OURS. Our erstwhile attorney was mad at us--what else is new; if you search on our nics, you will get the story--because we did not disclose that we OWN that account.

"Excuse me, Ma'am, we do not own that account."
"But you DO. Your names are on it."
"So? That does not mean we OWN the account. That account belongs to *P*. We have nothing to do with it."

I was going to try to go on, but after many expletives deleted, and all that, here is how it sits. We are responsible for an account that does not belong to us in the same way that we have a debt of $13,000.00 for a car we never did own, or wanted. [Please do a search on our nicknames: AngelinaCat, and AngelinaCat'Hub.]

My bottom line is to start reading this forum. No, I take that back. Go get a good meal, bath and relax. You have FOUND a place that you can ask questions, and emote all you want, and you have a good support group here. This forum has been our salvation since we found it in April 2008. I wish we had found it a year ago. It would have save us a whole lot of grief and anguish.

[AngelinaCat]

Hi Delee, I will put my 2 cents in: Get your name off of everything that you possibly can. You MUST talk to an estate planning attorney about your parents' home, and also your wife and children. Now is the time to start.

After that, you will have to ride out probably a year or more of lookbacks. This is because of Medicare, Medicaid, SS, and your possible BK. Please do your best and let us know how it goes.

My Best~~~

[keepmine]

If there is no equity in the parents home, it likely is a moot issue. What you'd do is list the debt on your petition and discharge your obligation. Your parents are then on the hook.

Were I you, I'd talk with a few bk lawyers and get all of your options explained. Most give free or low cost initial consultations.