Secured loan ????

[HELGALOANS]

Hello Everyone!
I just found this site and desperate for help!!!!!
Ill make it short.
Got a hard money loan against my dad commercial property. (Money was used to clear personal debt and pay off credit card debt)
Hard money loan amount = $340k

Plan was to get my credit back up then refi my home with a better interest rate and use the cash out funds to payoff the lien (At that time I had equity on the home)

Broker took his sweet time-market went down..home value went from 990k down to 520k

Now behind of almost everything- dad upset because he may lose his shop
Im broke and cannot afford to pay anymore...can I include a secured loan in a bk?

Payments:
Home= 4k
Credit Cards/Bills/Cars= 2,500k
Hard money= 2,900k (interest only)
HEEEEEEEEEELPPPPPPPPPPP

[2strong]

im still new as well but i think you would have to file a ch 13 to include this loan. and may be able to strip it depending on your sittuation. are you upside down on you home loan. or just not enough equity to refi..

[justbroke]

Payments:
Home= 4k
Credit Cards/Bills/Cars= 2,500k
Hard money= 2,900k (interest only)

I'm confused by your $2,500K payment on your credit cards. I hope you meant $2.5K or $2,500.

The real kicker is that you probably earn over the median income (especially with a $4K house payment), and that's going to disqualify you from a Chapter 7 (more than likely)...

In any event, your debts are more than likely OUTSIDE the allowable limits for a Chapter 13. (11 USC 109(e)).

That means Chapter 11. There are a couple of folks on this board that have or are in Chapter 11, but that's such a specialty and complex area, that all we can do is say to find a really good lawyer who does Chapter 11 Reorganizations.

Well, having wrote all that... let me now back up a bit. First, is the commercial hard money loan in your name? Is this a joint debt with your father's signature on it as well? All of this will make a big difference. If it's a business debt, it's going to be hard to discharge (the hard money loan). Tough questions because I wonder what the type of loan you received against the commercial property. Was it a business loan, or a personal loan?

When does the hard money loan balloon? (Obviously balloons as you're doing Interest Only on it.)

The answers may make me change my mind about whether you go into a Chapter 11 or a Chapter 13.

[HHM]

I assume your dad must have signed off on the loan since it is secured by his Comm_Prop. Basically, there is Joint Liability

More than likely you and your dad are personally liable for the debt and the debt is secured by the Comm_prop.

A bankruptcy will only discharged your PERSONAL liability to the loan, but your Dad's personal liability and the security interest in the Comm_prop would remain. In addition, even if a partial lien strip were possible (i.e. the Comm_prop is worth less than what is owed on the debt), you are not the one that can do that in a BK, since the properties is your dads, he would have to file BK.

Basically, the ONLY way to satisfy your competing goals of getting rid of the debt and protecting the property are this.
1. Pay off the note, you have to clear the security interest and the only way to do so is satisfy the lien in some way.

[HELGALOANS]

the property is my dads but i am on title. I was the only signer. ? how would this matter ?

[StartingOver08]

Ummm. Doesn't sound right. Both you and your Dad are on Title? You signed the hard money loan and he didn't?

Did the loan cover a half interest in the property and you are owner of the half interest?

[justbroke]

the property is my dads but i am on title. I was the only signer. ? how would this matter ?

This doesn't sound right. It matters because it's about who owns the property. You could leave your dad, literally, hanging... should you file.

If you're on the title (Deed) then it's your Dad's property and Your property... by law.

The key is, also, who is on the $340K loan, both of you? if so, they will be able to go after the property and your Dad, should you file.

[HELGALOANS]

My dad did not sign anything when I got the hard money loan. The documents were only under my name.
Title vesting is my dads name and my name. (You guys are right- it does seem weird that they didnt have him sign)
Its a lien placed as a 2nd.
The lien is my dads SBA..which hes the only one on the loan..and this hard money is placed as a 2nd lien which is only under my name...is there something I can do ?

I know a lot of you...are saying leave everything ruin my credit, down size, and etc..which I would..but this hard money is a interest only loan -were the principle balance doesnt go down and my payment is 3k a month and in a year or so it will be turned into a ballon payment...YIKES!!!...im in such a mess...Im broke...behind...and seriously cant live.

[justbroke]

My dad did not sign anything when I got the hard money loan. The documents were only under my name.
Title vesting is my dads name and my name. (You guys are right- it does seem weird that they didnt have him sign)
Its a lien placed as a 2nd.

Time to lawyer-up. Does Dad even know?

The lien is my dads SBA..which hes the only one on the loan..and this hard money is placed as a 2nd lien which is only under my name...is there something I can do ?

I know a lot of you...are saying leave everything ruin my credit, down size, and etc..which I would..but this hard money is a interest only loan -were the principle balance doesnt go down and my payment is 3k a month and in a year or so it will be turned into a ballon payment...YIKES!!!...im in such a mess...Im broke...behind...and seriously cant live.

That's what I was afraid of, the balloon payment. You're in a very hard place.

What's the value of the underlying collateral (the commercial property)? Wondering if the value isn't there when you look at the first lien (SBA loan). If not, they may not foreclose on the property because there's no value there.

You're going to need a really good strategy.

The commercial property is in jeopardy.

I did have hard-money financing on a commercial building before, but at least we were able to refinance to stave off any action. We were over secured by a lot, so it would not have been pretty to lose the building.

[HELGALOANS]

yes of course he knows.
so since he didnt sign ...can something be done>?

[justbroke]

yes of course he knows.
so since he didnt sign ...can something be done>?

That's what I meant by you need a good strategy.

Whether he signed or not depends on laws within your State and whether all signatures on a Deed are required to encumber the property with debt or to offer it as collateral for debt. I just don't know for your State.

There are many defenses and it depends on your State and how it perceives the title of your property. Is it titled as tenancy in common, or joint tenancy? Does it read John Smith and Joe Smith, jointly?

I just don't know... but I suppose your "strategy" will be to challenge the note (loan) on the basis that it can't encumber the property because.... (and the because it what you need to answer).

Maybe attacking the perfection of the note and mortgage?

I'm no expert.

Otherwise, I think it's toast... unless your father files too.