Question Can it get any worse?? Lien...

[Andrew]

Okay, first here is my story (short version hopefully):

- Bought my house in 2004 with 3 "friends" as an investment
- One year later, borrowed money from my father to buy them out: $75k
- Girlfriend moved in the house with me
- 2007, re-financed to landscape and pay off the credit cards and put my girlfriend on the title (btw, from personal experience, unless there is a ring, don't do this!!!)
- Market tanks
- Lost my job and had to take another one making $10,000 less a year
- Girlfriend quits job due to her health and goes from $40k a year to about $22k a year.
- 11/08 Girlfriend and I break up (not nicely) and she takes off with most of my stuff, leaving me an empty house (signed it over) and $25k in CC debt
- 11/08 Stop making house payment
- 5/08 Foreclosure process underway
- 7/09 I file for chapter 7 to erase CC debt
- 11/10/09 BK discharged!!
- 2/1/10 House to be sold on court house steps (actually looking forward to having it gone) but they put it off until the 4th for some unknown reason.
- Same day, father decides that if he puts a lien against the house, he can write off his loses.

My question is this: I was close to having most of this behind me; bk is discharged and home is about gone and now my father wants a lien. From what I understand, this will stop the foreclosure process again, but I don't know if this will stay with me or if it stays with the house. Will a lien go on my credit basically is the question. I have been working hard the last few months to completely change the way I spend, and working a plan to start building my credit back up and this just seems like one more stigma I will have.

Does anybody have any information on Lien's and what they can do to your credit? Thanks guys.

Andrew...

EDIT: I just realized this might be in the wrong section. If so, please move. Thanks mods...

[keepmine]

You state you re-fied the house. If that's the case, I don't see how he has any legal standing.

[Andrew]

Thank you keepmine. Even though I would like to think my father would not pursue legal action, you never know. My father loaned me the money privately and nothing was ever recorded. He only has two days to file the lien and I don't know how long the process takes.

If anyone here has ever had a lien on their home, does it show on your credit report? How can a lien affect me rebuilding my credit? Auto loan or something similar? Thanks guys!!

Andrew

[frogger]

It can always get worse. Be thankful for the things you have.

When I wake up every morning, the first thing that I do is to check the obituary column in the newspaper to make sure I'm not there.

The second thing I do is to check the police reports to make sure I haven't been arrested.

As long as those two things work out, and I don't have to go to the help wanted section of the paper, I'm having a pretty good day.

How about you?

[catleg]

It's probably so he can take the loss for taxes. I think it's in your interest to help him do this if you can.

[HHM]

Not sure on what basis he has a lien right? A loss is a loss, why does he need a lien on the house to prove it? Your father still has a bad debt regardless of having a lien.

[BCA2009]

Not sure on what basis he has a lien right? A loss is a loss, why does he need a lien on the house to prove it? Your father still has a bad debt regardless of having a lien.

I agree with HHM, If your father has documentation (canceled checks), where he loaned you the money, and he has a copy of your bankruptcy (evidence of your inability to repay) , he could claim the loss. However, unless he has alot of business/investment income, he will be limited as to how much of the loss he can take each year. Still better than nothing. But be prepared to provided good documentation. If it gets reviewed by the IRS, they look at transactions between family members very carefully. Did you ever make any payments? Was there a stated interest rate? You didn't have anything in writing, so that is a ding against you. If you did make any payments, did he pick up the interest income on his tax return? A written agreement is not leagally requied to enforce a contract, but it would be an element that the IRS could use against you.

Just FYI for anyone reading this, always document related party loans and preferably perfect them by filing the appropriate UCC documents and liens at the clerck of court. You can always void them, but down the road, it hard to prove something that wasn't in writing.

[catleg]

Sounds like he's seen the accountant for this year's taxes and is backpedaling to show this was a loan and not a gift.