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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 37818
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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I am current on my house, but upside down by 1 million. We

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I am current on my house, but upside down by 1 million. We have talked to a bankruptcy attorney and we only qualify for chapter 11. I am a neurologist. Be due to medine changes we have a negative net worth ans does my practice. We would like to get a smaller house before we stop paying on the current. Our plan is to purchase a smaller house 20% down with gift from parents and then pay the current house for several months before we stop paying. We will try a short sale with the bank since they will lose alot in a forclosure.
I am told that personel chapter 11 takes longer than chapter thirteen. If we don't file for 2-3 months after stop paying say april 2011. Does that protect the gift. With the real estate market the way it is, the current bank would get nothing.
Could they force the other bank to call the loan 30year fixed the new smaller house that We purchase with the gift? I would be paying timely on it and could also put my 20 year old son on the title in addition to my wife . Would this offer protection?

Would paying the first full or partial and not the second or vice-versa pospone foreclosure ?

I am 60 years old and have been recently diagnosed with prostate cancer. Good prognosis but need surgery which will stop income from my practice by at least 50%.
I have disability insurance which will make up the rest. Can they try to garnish my disability income or use my life insurance proceeds to satisfy judgements.Would these proceeds be turned over to thre chapter 11 trustee if I pass away?

Thanks for you help I am a Neurology expert on JA. Dr. S

The gift property will be part of the bankruptcy, so I don't know how this will help you. Your creditors could ask the court to sell the house and use the money to pay your debts.


Disability income is exempt, as is life insurance, but not if you use the cash value for your own benefit.


In Chapter 11, you are the trustee, and it's up to you to craft a plan that will work. Chapter 11 is quite expensive. It's not clear from your facts that you cannot qualify for a Chapter 13. Moreover, if you are underwater with everything, then the only thing that you would prevent you from filing Chapter 7 would be if you have non-retirement account assets (brokerage/investment/CDs/etc.) of substantial value.


Way too little info in your post for any definitive analysis. Not sure how much you want to reveal in this public forum.


Most bankruptcy lawyers give free first consults and a good one will have a computer system capable of analyzing your financial circumstances.


For a bankruptcy lawyer referral, see: and


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