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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12925
Experience:  B.A.; M.B.A.; J.D.
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I am still trying to sort out options to chapter 11. I have

Resolved Question:

I am still trying to sort out options to chapter 11. I have a 1 million judgement by default on a home foreclosure deficiit which can be exercized on May 18 by the bank.

I am 61 and a sem-retired MD. 0 net worth I am on total disability from prostate cancer. All of my income is from disability and it will continue until I am 65. In tennessee medical disability income is exempt from judgements. I do not qualify for 7 or 13. we don't think that the bank will agree to a chapter 11 plan. i would also lose my disability income exemption in a 11. My attorney said 2 best option now may be settlement bank which we are working on or just take the judgement. I have questions about the consequences of the judgement. Here are the facts

By state law my disability income is exempt from garnishment. so the bank cannot get any of that.
The assets we have now would be within the judgement exemptioms except for our current house which has about 50K of equity. It will be paid off in 4 years and will be worth 400K. It is owner financed
My income is and will be decreasing. I have no future inheritance. Pension and SS income is also exempt in tennessee.
My wife, who is also party to the judgement does not work but is expecting a large inheritance sometime in the future years 500-800K.
So my questions are, if we take the judgement.

I understand that the bank can put leins on my home and my cars? So when sold, they get sale proceeds.

Are they still able to seizure money from my bank accounts?

Could the bank get part of my wife's inheritance in the future?

If I am able to save money from my disability income to buy another home cash. Can theytake that money or put a lein on the new house? The cash would come from exempt disability income
How about if the cash came form wife's inheritance?

Thanks


DrS
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 3 years ago.

Thank you for giving me the opportunity to assist you. I encourage you to ask me for clarification, if you are not clear with my Answer.

 

Question: I understand that the bank can put leins on my home and my cars? So when sold, they get sale proceeds.

 

Response 1: Yes, but only after the mortgages and loans have been paid off and after any exemptions that you are entitled to. These are the same exemptions that you would be entitled to if you filed for bankruptcy protection.

 

http://www.tennessee.freebankruptcyevaluation.com/tennessee/bankruptcy-exemptions.html

 

 

Are they still able to seizure money from my bank accounts?

 

Response 2: Yes, but only if the money in the account is not exempt.

Could the bank get part of my wife's inheritance in the future?

 

Response 3: Yes.

If I am able to save money from my disability income to buy another home cash. Can theytake that money or put a lein on the new house?

The cash would come from exempt disability income

 

Response 4: Yes. Your disability income loses its exempt status at that time.

 


How about if the cash came form wife's inheritance?

 

Response 5: The answer is still yes.

Customer: replied 3 years ago.
So would 11 be better? The same without penalty interest.
Expert:  Phillips Esq. replied 3 years ago.
What did you mean by " The same without penalty and interest?"
Customer: replied 3 years ago.

Yes. it seems like the penalties are almost the same with both default and 11 except in default the persuit would be endless with the 10% interest added to it,seizing my bank account,etc. So would 11.be a better deal?

 

I have some other question about 11 I would like to ask . will submit new JA question after we clear this one. thanks DR S

Expert:  Phillips Esq. replied 3 years ago.

Yes. it seems like the penalties are almost the same with both default and 11 except in default the persuit would be endless with the 10% interest added to it,seizing my bank account,etc. So would 11.be a better deal?

 

Response: If you have substantial assets that are not exempt, which a judgment creditor can reach, then Chapter 11 would be preferable. Otherwise, defaulting is better. Kindly note that your wife's inheritance eventhough substantial is a future interest. Your wife does not have a vested interest in the inheritance. So her creditors cannot reach that inheritance until she actually inherits it. The Donor of the inheritance may change his/her mind about giving her the inheritance and she may also disclaim her interests in the inheritance pursuant to Internal Revenue Code Section 2518.

Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12925
Experience: B.A.; M.B.A.; J.D.
Phillips Esq. and other Bankruptcy Law Specialists are ready to help you
Customer: replied 3 years ago.
Thanks for your help. I accept with bonus. Please clerify, why would judgement be better? I do not have substanial assets but I am worried about eternal harrasment, bank account seizures, and loss future assets such as home proceeds from eventual sale ? Ihave several other questions, I will submit as new questions to you. thanks JS
Expert:  Phillips Esq. replied 3 years ago.

Thanks for your help. I accept with bonus. Please clerify, why would judgement be better? I do not have substanial assets but I am worried about eternal harrasment, bank account seizures, and loss future assets such as home proceeds from eventual sale ? Ihave several other questions, I will submit as new questions to you. thanks JS

 

Response: Thank you for the Accept and the Bonus.

 

The biggest advantage is that you would not be under the control of the bankruptcy Court. Also, remember that your creditors may object to your Chapter 11 reorganization plan making the filing futile. Your creditors cannot harass you for the debts indefinitely. There are Statutes of Limitations for collection of debts and for Judgments. In Tennessee, these are 6 and 10 years respectively. See Tennessee Code Annotated Sections 28-3-109 and 28-3-110(2).

 

Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12925
Experience: B.A.; M.B.A.; J.D.
Phillips Esq. and other Bankruptcy Law Specialists are ready to help you

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