OK I came back after 25 years last March

[Aslan]

I looked into bankruptcy years ago when I first lost my job and house. The lawyer said the debt does not go away it's just paid in a different matter... I don't know how it would work with the people I owe. They are really not creditors they are a condo assoc and a attorney.

Actually, it depends on the type of bankruptcy. Chapter 7 or Chapter 11. Chapter 11 is generally what you would do if you were a small business and could pay off the debts...ya just need time to "reorganize". Thats why most corporations go through Chapter 11...so they can renegotiate debts, organize things, and then sort of "reset".

Chapter 7 is what indivduals usually do. And, whoever you talk to was incorrect (I think). It's true that your debts don't just get "erased"...DEPENDING on the type of debt. For example, certain types of debt like child support (I think) and tax liability...cannot be discharged. So, you'd still owe that....which is why bankruptcy isn't really a good option for me...a person with primarily only tax debt. Almost ALL other debts can be discharged via Chapter 7.

Now...does that mean you automatically get off scot-free? Not necessarily. You essentially have all of your creditors get a notice that you're bankrupt...and they can choose to accept that or challenge it during a bankruptcy hearing in court. It is HIGHLY unlikely that they could argue you still owe them money. Essentially, the only time they can argue that they should get paid...is if you've done something obviously with the intent of stealing their money.

For example, if you KNOW you're going to declare bankruptcy...and you go on a shopping spree before filing...the credit card company will try to get that shopping spree money or what you bought with it. Even in the most obvious of cases....this is really difficult for credit card companies to do. I heard a case once where a kid went to casinos in Vegas and took out like $8,000 in cash, then declared bankruptcy. The credit card company got nothing...because the cash was spent on gambling...thus there was nothing they could sieze and the person had no money.

There are also limits on what a creditor can sieze. They can't sieze your retirement or social security income. And unless you have some items of real value...they generally can't sieze your assets. Like, they can't come in and start taking your lounge chair, dresser, bowling balls, and your bowling shirts. On the other hand, if you have a rare car collection, stacks of cash, or some gold coins...they can sometimes sieze those.

And yes, the HOA and lawyer ARE "creditors", by definition. Anyone you "owe", is a "creditor".

Where your case is "complicated" is how the collateral is specified. The HOA obviously is going to use the condo as collateral...but they can't take more than you owe. So, lets say the condo is worth $75k and can be sold for $64k...and you owe the HOA $2k + court costs of $2k = $4k. They would take $4k in the sale and YOU would get $60k. They can't take more than you owe them.

The same is true for the lawyer. If the condo is listed as collateral...and you owe him $30k +$6k in his court costs/fees...then he takes $36k from the sale of the condo (minus the $4k to the HOA) and you're left with $14k from the sale. The credit card company would get $0 because the condo wasn't collateral on their line of credit to you.

I know you don't want to lose the condo...but at this point, it may be the best option...because you can take the remainder from the sale, get back on your feet, and just rent a decent apartment. You'd have bad credit from the bankruptcy...but no debt at all. And, if the lawyer doesn't have a great claim to the condo...you may end up with almost all of the value of the condo in your pocket (minus the HOA fees).

I'm a bit hesitant on your current plan of some small loan that can fix some minor issues. Sure, getting caught up with the HOA and credit cards is a good start...but you have relatively little income coming in...and all it would take is a couple bad months where the car breaks down or you have to get a root canal...and suddenly you're back in the hole...except the hole would now involve another creditor. The plan hinges on some magic credit score that gets you qualified for a mortgage...that can get you out of debt. What happens if the credit score doesn't jump up or the mortgage company decides you need a higher score?

As bad as your situation is...I'd prefer it to mine. I have ZERO income...no social security eligibility...no retirement...and my only "debt" is with the IRS. So, for me, bankruptcy is completely off the table and I have no condo that I can mortgage or sell. The good news is I think 2/3 of the IRS debt can be negotiated away. And...my credit is strong and I have a significant credit line to work with...but I'd prefer not to add on any debt now that I'm (until the tax issue) essentially debt free.

[drlawsoniii]

what does the yellow banner on the icon for this thread mean?

[LOUVIT]

Actually, it depends on the type of bankruptcy. Chapter 7 or Chapter 11. Chapter 11 is generally what you would do if you were a small business and could pay off the debts...ya just need time to "reorganize". Thats why most corporations go through Chapter 11...so they can renegotiate debts, organize things, and then sort of "reset".

Chapter 7 is what indivduals usually do. And, whoever you talk to was incorrect (I think). It's true that your debts don't just get "erased"...DEPENDING on the type of debt. For example, certain types of debt like child support (I think) and tax liability...cannot be discharged. So, you'd still owe that....which is why bankruptcy isn't really a good option for me...a person with primarily only tax debt. Almost ALL other debts can be discharged via Chapter 7.

Now...does that mean you automatically get off scot-free? Not necessarily. You essentially have all of your creditors get a notice that you're bankrupt...and they can choose to accept that or challenge it during a bankruptcy hearing in court. It is HIGHLY unlikely that they could argue you still owe them money. Essentially, the only time they can argue that they should get paid...is if you've done something obviously with the intent of stealing their money.

For example, if you KNOW you're going to declare bankruptcy...and you go on a shopping spree before filing...the credit card company will try to get that shopping spree money or what you bought with it. Even in the most obvious of cases....this is really difficult for credit card companies to do. I heard a case once where a kid went to casinos in Vegas and took out like $8,000 in cash, then declared bankruptcy. The credit card company got nothing...because the cash was spent on gambling...thus there was nothing they could sieze and the person had no money.

There are also limits on what a creditor can sieze. They can't sieze your retirement or social security income. And unless you have some items of real value...they generally can't sieze your assets. Like, they can't come in and start taking your lounge chair, dresser, bowling balls, and your bowling shirts. On the other hand, if you have a rare car collection, stacks of cash, or some gold coins...they can sometimes sieze those.

And yes, the HOA and lawyer ARE "creditors", by definition. Anyone you "owe", is a "creditor".

Where your case is "complicated" is how the collateral is specified. The HOA obviously is going to use the condo as collateral...but they can't take more than you owe. So, lets say the condo is worth $75k and can be sold for $64k...and you owe the HOA $2k + court costs of $2k = $4k. They would take $4k in the sale and YOU would get $60k. They can't take more than you owe them.

The same is true for the lawyer. If the condo is listed as collateral...and you owe him $30k +$6k in his court costs/fees...then he takes $36k from the sale of the condo (minus the $4k to the HOA) and you're left with $14k from the sale. The credit card company would get $0 because the condo wasn't collateral on their line of credit to you.

I know you don't want to lose the condo...but at this point, it may be the best option...because you can take the remainder from the sale, get back on your feet, and just rent a decent apartment. You'd have bad credit from the bankruptcy...but no debt at all. And, if the lawyer doesn't have a great claim to the condo...you may end up with almost all of the value of the condo in your pocket (minus the HOA fees).

I'm a bit hesitant on your current plan of some small loan that can fix some minor issues. Sure, getting caught up with the HOA and credit cards is a good start...but you have relatively little income coming in...and all it would take is a couple bad months where the car breaks down or you have to get a root canal...and suddenly you're back in the hole...except the hole would now involve another creditor. The plan hinges on some magic credit score that gets you qualified for a mortgage...that can get you out of debt. What happens if the credit score doesn't jump up or the mortgage company decides you need a higher score?

As bad as your situation is...I'd prefer it to mine. I have ZERO income...no social security eligibility...no retirement...and my only "debt" is with the IRS. So, for me, bankruptcy is completely off the table and I have no condo that I can mortgage or sell. The good news is I think 2/3 of the IRS debt can be negotiated away. And...my credit is strong and I have a significant credit line to work with...but I'd prefer not to add on any debt now that I'm (until the tax issue) essentially debt free.

Thank you... That was full of information...Now...

As far as selling the condo and renting...NO. Rent's here are at least 900. a month. When I am caught up here, I pay 250. a month fees and that's it. Of course utilities also elec and cable only. As far as luxury assets I now remember I told the lawyer at the time that I also own a 93 z/28 Camaro but that is an old car that me and my son were working on. He said the courts would want to see it anyway. Well I can't let them see it, the video will explain that. I have given the car to my son and grandson he has not titled it in his name yet and the courts want to see any assets you have given away in the past year, I guess so you can't hide stuff., I know it's just a car but I have my blood sweat and tears and $$$ in it over 15 years I own it. That car will never leave the family. That was a promise I made.

This will explain it's not just a 25 year old camaro

http://smg.photobucket.com/user/louv...ml?sort=3&o=46

http://smg.photobucket.com/user/louv...ml?sort=3&o=42

[classygranny]

Personally, I don't think bankruptcy is the best option for you. You seem to have learned from some of your past mistakes and as long as you don't keep making those and digging the hole deeper, you should be able to find away around this situation.

So, if I understand correctly, you want to pay off $1500 in credit cards and collection debt; $1800 in past due HOA fees, and then as soon as the credit score goes up, you want to borrow against the equity in the condo, to pay the $35K to the attorney loan. In the meantime, you feel you can meet your monthly obligations and pay $350 towards a short term loan. Do you have anything??? that could be used as collateral for a short term loan? A current vehicle-not the Camaro? Anything?

Did I get all this correct?

[LOUVIT]

Personally, I don't think bankruptcy is the best option for you. You seem to have learned from some of your past mistakes and as long as you don't keep making those and digging the hole deeper, you should be able to find away around this situation.

So, if I understand correctly, you want to pay off $1500 in credit cards and collection debt; $1800 in past due HOA fees, and then as soon as the credit score goes up, you want to borrow against the equity in the condo, to pay the $35K to the attorney loan. In the meantime, you feel you can meet your monthly obligations and pay $350 towards a short term loan. Do you have anything??? that could be used as collateral for a short term loan? A current vehicle-not the Camaro? Anything?

Did I get all this correct?

you are correct. No I have nothing of value. As I may have said I was approved for up to a 70% equity loan until they see the association is not FHA approved. And I need my credit score maybe 40 points higher to get a conventional loan. If I could get a 3000. short term loan it would be short term because as soon as my credit cards are zero and my collection is off my record I will have the 40 points. Then I could go to lending tree or somewhere and get a quick equity loan and pay off EVERYONE. I would like to do a reverse mtg and owe nothing. My kids are doing well and they don't need this place when I go even though they would still get cash out of it.

You're classy and smart....