Question Family debts

[lala]

Hi, my husband and I borrowed money from my father and my husband's brother back in March 2007. They each gave us $5000 to help with another legal issue at the time. My husband's brother basically said at one time that he did not expect us to repay him. My father said that we could repay him whenever. My husband was doing work for both of them to "repay" them. But, never really did enough to repay the entire amount.

Our attorney says we need to list those debts. I'm wondering what happens when we list those debts? Will our family members be contacted in some way?
We are trying to keep most of this bankruptcy stuff to ourselves and want to keep our families out of it.

Thank you!

[ecsclb1724]

yes, from what I understand you have to list them as a creditor and they will get a letter notifying them that the debt was included in bankruptcy and you are no longer responsible for the debt (however, you CAN still repay them)

[liz417]

Yes, if they are listed as a creditor, they will be notified of your BK.

[LuciluS]

I asked our Attorney the same question. He said it was imperative All Creditors must be listed including all medical bills which are outstanding as of the date of filing.

I have several family member debts..2 small & 1 large debt. I didn't want 1 of 3 to know about our bankruptcy. He stated if I specifically withheld listing a Family member who $$ or owed to, our case possibly could be dismissed. Me thinks I will list them All

He told Hubby and I, it would be an additional $26 paid to the Court to add a Creditor after initial filing of BK. I forgot to ask him how much his fee would be.

Luci

[lala]

Thanks everyone. This whole BK thing is making me sick to my stomach. I dread telling our families. I go from feeling optimistic one day to tears the next.

[frustrated7]

Hugs to you. I know how hard this situation is. I can't tell you how many times I have felt physically sick from the stress of our financial situation. We also had to list my inlaws for debt we owed and also my parents because we had paid them back within the past year. Both sets of parents were aware of our BK before we actually filed though. My parents found out from the nonstop creditor calls to them (who we do not live with), with those awful creditors trying to shame us into paying to get them to stop calling family members. My inlaws found out because my husband had to ask them a question about a possible inheritance before we could file and then FIL showed up at our house...and then we had a huge nightmare on our hands. I have to say that without a doubt the worst part of it was family members finding out, for us at least. It is tough enough without throwing problems with family members into the middle of it.

My recommendation? Since they will find out because they have to be listed as creditors, tell them before they get the letter in the mail. Keep it short and simple. Say that you have some financial problems (which they are probably at least partially aware of, since you had to borrow money from them), had to make the decision to file BK, that they would be getting a letter in the mail because you owe them money, and that you don't feel comfortable talking about it. If you intend to pay them back after the BK is over, then by all means let them know that as well. Just DO NOT pay them back anything until after the BK is completed...that could create a huge mess, as myself and others on this board can attest to.

Best of luck to you. Please keep us updated.

[eddiep]

lala

I had borrowed money from my fil. We didn't want to list him as a creditor either because he said that we didn't have to pay him back. After he lent us the money mil was put in a nursing home unexpectedly. He is now in the process of applying for medicaid (or medicare?) anyhow, he now has to show his bank statements and explain any withdrawals over a certain amount. So we are definately going to bk the loan from him so that he has an accounting for where the money went and that he can not recoup the money. He would never sue us but not sure if mediwhatever would. So we are protecting ourselves and him.

[Flamingo]

Our good friends lent us the money to retain the attorney which included the filing fee ($1200). We've loaned each other money for many years and basically raised each others kids as they grew up together so they were there to help and told us we could pay them back whenever as they knew we were good for it when we recovered and understood our situation and saw us go under with a job loss. We mentioned this to our attorney who asked us to check with them to see if they wanted to be listed as creditors. They did not want anything to do with it and we advised our attorney. The information was included to the Trustee but they did not appear on our matrix. We have long since paid them back, with interest. It's been a while since 2002 when we filed but always advise your attorney of family/friend debts no matter how trivial and get the advice you need for your particular situation.

[lala]

Thanks Everyone. I guess we just need to buck up and let people know what's going on.

Flamingo, since your friends weren't in your matrix, did they get notice of the bankruptcy?