My folks are in a bind and I think BK may be the answer.
Due to medical Bills, my folks have refinanced their house multiple times and now owe, $210m on a home worth 190m, plus another $60m on a second on that same home. They have a $27m loan on a truck worth $20m, plus another $60m in Unsecured Debt of $57m in CC and $3m in medical bills.
My dad makes about $75m a year, about $10m over the Calif limit. It's just Mom and Dad, though they support my 40 year old sister, but legally she won't qualify as a dependent. Their budget is basically $2300/mo for Food, Util's, fuel, Insur, Prop Tax, Prescriptions, Co-pays for regular Dr. visits, etc.. Debt payments are $1400 for Primary Mortgage, $550 Second Mortgage, $450 Car, and $1400 for minimum unsecured payments. My Dad clears $4400/mo.
So, while their income is not under the State Ave, I assume their is some hope if their mim debt payments equal 86% of their take home?
Now for a few actual questions.
My Dad is 66 and has been hoping to retire before he dies in his truck(trucker). He has stopped putting $$ into his 401 to pay these Credit Cards. Should he have? If we believe he can get through the Ch7, how would the court look at 401k withholdings. He actually took out $15m last year to help make his payments, will this make his income seem higher? He has no pension, etc. at this time. He wants to start SS soon, but should he wait until we get through the Ch7, or could the fact that he is eligible for early SS hurt him in some way?
My goal for him would be to discharge all the credit cards, medical bills, and the second on the house. I know the second is by definition secured, but since the value of the house is more than the value of the first there is no value for them, so would the court look at that.
If we could get rid of the Second and all unsecured then their income of $4400/mo(net) would basically match their cash expenses of $4200, leaving them the $200 extra a month to start making 4% 401k witholdings again.
Currently, I am clarifying their budgets, detailing all debts, researching attorneys now. I would love to stop having my Mom pay their unsecured payments immediately, but want to speak with the attorneys, I have told her to make all insurance, property tax, prescription drug, new doctor visits co-pays, etc. first and call me if she doesn't have the cash to make the unsecured at any point.
Other than the home mentioned and the truck financed, they have 1 other car worth about $4k with no debt. I understand some rule about only 1 vehicle, but would it matter that my Dad is gone on the road in his truck Mon a.m to Fri p.m so my mother would be without any transprtation if they where limited to 1 vehicle. Other assets are only small personal stuff, except they have 2 quads worth about $2500 each debt free and my dad has a Goldwing motorcycle worth about $2000. I assume the quads and motorcycle would need to be liquidated. How would it look if these other assets where liquidated and used to pay upcoming car insurance, license fees, and annual property taxes all due in the next three months.
Any answers to my questions of feedback would be greatly appreciated. Sorry for the long post, but this is a big problem and there are a bunch of what-if's!
Due to medical Bills, my folks have refinanced their house multiple times and now owe, $210m on a home worth 190m, plus another $60m on a second on that same home. They have a $27m loan on a truck worth $20m, plus another $60m in Unsecured Debt of $57m in CC and $3m in medical bills.
My dad makes about $75m a year, about $10m over the Calif limit. It's just Mom and Dad, though they support my 40 year old sister, but legally she won't qualify as a dependent. Their budget is basically $2300/mo for Food, Util's, fuel, Insur, Prop Tax, Prescriptions, Co-pays for regular Dr. visits, etc.. Debt payments are $1400 for Primary Mortgage, $550 Second Mortgage, $450 Car, and $1400 for minimum unsecured payments. My Dad clears $4400/mo.
So, while their income is not under the State Ave, I assume their is some hope if their mim debt payments equal 86% of their take home?
Now for a few actual questions.
My Dad is 66 and has been hoping to retire before he dies in his truck(trucker). He has stopped putting $$ into his 401 to pay these Credit Cards. Should he have? If we believe he can get through the Ch7, how would the court look at 401k withholdings. He actually took out $15m last year to help make his payments, will this make his income seem higher? He has no pension, etc. at this time. He wants to start SS soon, but should he wait until we get through the Ch7, or could the fact that he is eligible for early SS hurt him in some way?
My goal for him would be to discharge all the credit cards, medical bills, and the second on the house. I know the second is by definition secured, but since the value of the house is more than the value of the first there is no value for them, so would the court look at that.
If we could get rid of the Second and all unsecured then their income of $4400/mo(net) would basically match their cash expenses of $4200, leaving them the $200 extra a month to start making 4% 401k witholdings again.
Currently, I am clarifying their budgets, detailing all debts, researching attorneys now. I would love to stop having my Mom pay their unsecured payments immediately, but want to speak with the attorneys, I have told her to make all insurance, property tax, prescription drug, new doctor visits co-pays, etc. first and call me if she doesn't have the cash to make the unsecured at any point.
Other than the home mentioned and the truck financed, they have 1 other car worth about $4k with no debt. I understand some rule about only 1 vehicle, but would it matter that my Dad is gone on the road in his truck Mon a.m to Fri p.m so my mother would be without any transprtation if they where limited to 1 vehicle. Other assets are only small personal stuff, except they have 2 quads worth about $2500 each debt free and my dad has a Goldwing motorcycle worth about $2000. I assume the quads and motorcycle would need to be liquidated. How would it look if these other assets where liquidated and used to pay upcoming car insurance, license fees, and annual property taxes all due in the next three months.
Any answers to my questions of feedback would be greatly appreciated. Sorry for the long post, but this is a big problem and there are a bunch of what-if's!