Met with Bank Today...

[nw138413]

The bank put a deadline on us to meet with them to day or they were going to file suit against us for the business loan.

We went in and had calculated what they would have received after trustee and attorney fees from the chapter 13 process. We summed that and discounted that sum at 5% and came up with an offer to them.

My mother owns her and my father's home outright (never been in Dad's name) and there is plenty of equity there. They seem very willing to settle for 80% of the equity in that home as a lump sum to settle the debt. Our attorney is putting it in writing to send to them in two days.

They are willing to settle for 30 cents on the dollar of what is owed from the failed business debt. And we are fortunate enough to avoid filing for bankruptcy.

[utohlar]

Your going to risk your moms house for a failed business instead of filling for bankrupcty?

[BKDefender]

That would be my exact answer utohlar. If my choice was to file bankruptcy to get rid of debt from a failed business or make my mom use 80% of the equity in their home that they've worked their life to pay down, I'd have to choose bankruptcy if it was an option.

--William

[nw138413]

It's not me borrowing the money per se. It is my father (her husband) who is borrowing it and paying it back. I will be paying him something over time to cover my portion. He and I were partners in the business which failed and we are settling the debt for $.30 on the dollar. It is less costly over time than the bankruptcy itself.

[Mi Bankruptcy]

Cant he file and then let the bank come after you. Then you file? What did he use as security for the business?

[nw138413]

It was likely not the best loan decision the bank ever made.

We had two businesses. One which is still a going concern and the restuarant which is defunct. Residual value of restaurant equpiment is basically 10 cents on the dollar. They sold it for that recently. The other part of the note was for leashold improvements which there is NO security interest.

The value of our continuing operation has decreased substantially since we intially applied for the loan due to the poor economy and stock market. The value of this business was a factor in receiving the loan.

He was going to have to file for chapter 13 and make payments over the course of 60 months anyhow. The amount we settled for is less than the total amount of payments he would have had to pay over that time frame. It is less than the bank would received under the process too, but they get the cash up front.

Ideally we would rather not file for bankruptcy.

This is not because we did not live within our means, in fact we are both quite frugal. It isn't because of medical catastropy or other hardship due to unemployment. H

[HHM]

If settlement would be cheaper than a chapter 13, then settlement is better, but find a different source of funds.

If there is no source of funds aside from the proposed one, YOU should take responsibility and file the BK 13.

Incidentally, why are you simply a non-consumer chapter 7. Why are your chapter 13. You may want to talk to a few more lawyers.

[helpmeout]

Can't you find another source of funds?