Scare the Pants Right Off Me

[brokemomma]

Okay, my husband and I have realized that there is no way we will be able to repay all the debt we have. After sleepess nights, we put a retainer on a lawyer and have been paying him partial payments for about 4 months. He will not file our bankruptcy until it is paid off so we are just hoping we can find the money before we're sued.
At this point I'm not sure if we'll be in a chapter 7 or 13 because we are still putting our expenses together.
My biggest concern at this point is our credit union. We have a car loan, our mortgage and a credit card through them. I've been keeping current with those things because I don't know what they could take if we're not.
Anyway, we are two years behind on property taxes. Foreclosure will come soon. I talked to the credit union and they agreed to give us a loan to catch up on these. I know they aren't dismissed in a bk anyway. (4,000 in taxes we owe)
What I'm wondering though is would we be allowed to reaffirm all of this debt if all our other debt with credit cards is discharged? Can we even accept the loan at this point. We've been working with the Credit Union and they know we are going bk. Do you have any advice or knowledge regarding this? I've called my lawyer but he hasn't returned my call. Thanks in advance for any help you can give.
Sorry this is so long and thanks for reading.

[AngelinaCat]

Hi brokemomma, welcome to the forum.

It will help us to help you if you can give a little more information. What state are you in? Are you planning on trying to keep the house, or will you be letting it go? Or have you really decided yet? That decision is probably premature at this stage. Do you both work, or does just one of you? Are the job/s secure, or are they shakey?

I am glad you have a good relationship with your CU and they already know you will be filing eventually. We had to reffirm our auto loan and an overdraft protection loan with our CU.

Many members will advise closing your checking and savings accounts in your present institution, and opening new ones in a bank or CU that has no connection to the original institution. This is because of 'cross-collateralization' where an institution will raid a customer's checking/savings accounts when payments to a loan or a credit card from the same institution falls delinquent.

For now, until you decide what you will do about the house, I advise against taking on a new loan.

Good luck to you!

[DeadManCrawling]

Angelina is right, and the "other members" she speaks of, who suggest opening new accounts for deposits are correct in many cases. Not all, but many.

The CU can use cross-collateralization agreements and take next month's grocery money to pay your CC bill . . . or car payment . . . or mortgage payment.

It is just not worth the risk.

I would open a new account NOW.

You may think these folks are friendly, nice, and are your friends. One day, you may find you HAVE no money, and they will calmly explain that they had NO control over this, they simply had to follow bank policy. Or, the BOSS said, we do it this way. A top manager made the decision. And so on.

The end result is the same: Catastrophe for you and your family. Please use another bank for deposits. I can almost guarantee the CU has a cross-collateralization agreement in the fine print of every account you owe on.

Protect your family.

Separate the bank from what you owe and what you earn. This will save your sanity and finances while you deal with this.

And I would not inform them of this. I would just do it and have any direct deposits changed without informing them. Probably, they currently have befriended you and this COULD be a backup avenue for them to make sure you pay.

I cannot speak to their offer of a new loan. But in general, that sounds like a very bad idea. A new loan taken while they are aware you are going to file might make that loan not dischargeable in BK. Meaning, it would survive BK and you would have to pay it back as part of a CH 13 or outside a CH 13 or 7. Either way, it hurts you badly.

Talk to some attorneys, and get your important money the hell out of there.

Sorry for the bluntness. This is survival for your family, and the CU could care less if you starve or end up on the streets. They may seem friendly, but the blood is in the water, and they are the sharks on patrol.

Best,

-dmc

[poorold]

I believe property taxes are associated with the property ONLY. Not YOU.

when the bank forecloses, to get clear title the bank will pay the property taxes.

also, imo, I find it incredible that the credit union knows you will be filing bankruptcy but is willing to give you a loan. Doesn't smell right to me. Talk to your lawyer.

If you are going to lose your house through foreclosure, why are you paying the mortgage? Talk to your lawyer. It sounds like he is taking your maoney but not helping you figure all this stuff out and reducing your anxiety.

[AngelinaCatHub]

Credit Unions have different rules than banks. I believe they ALL cross collateralize. If they know you are in bk, I am surprised they have not closed all your accounts. My CU of 45 years closed mine until I reaffirmed. If you reaffirm with a CU, it will be all or nothing. They are not going to reaffirm you house without bringing your car into it. As far as the loan for taxes, Taxes are not exempted and must be paid if you are going to keep the house. Under that circumstance I could see the Trustee understanding the fact you had to pay the tax to keep the house IF you reaffirm the CU. 'Hub