If I understand your answer there is no time limit on how long the trustee has the right to take the money from the law suit after we file, what about other monies we may get from sale of the house or my car, worth less that 10K? Also it appears that if I wait, get the funds and use them to repair my home before we file BK we should be ok? But that still doesn't answer the other question, how long after we file can the trustee take any funds we get ?
There is no limit on the amount of time a trustee can wait to get settlement money. I know a trustee who kept a Bankruptcy open for 7 years for a lawsuit that took that long to be resolved.
If you sell your house, the proceeds (up to $150,000) are protected for up to 18 months after the sale.
However, if you sell your car, the proceeds would not be protected, except that a married couple is allowed to keep up to $300 cash if a Bankruptcy is filed.
Are you planning on filing a Chapter 7 or a Chapter 13?
(Probably the only reason to file a Chapter 13 is if you want to "strip" [discharge] one or both equity loans. If you are not sure if you can or want to do this, what is the current market value of your home, and what are the balances of the mortgage and the equity loans?)
Law suit aside, after we file for BK how long does it take for the BK to close so we can go back to living without fear of phone calls, judgements etc...
Didn't know we could discharge the equity loans??? Does that put the house into foreclosure?? Current total of all loans is $ 430K house value at best is 460K.
Since the house is worth more than the total of the loans, you would not be able to have the equity loans discharged. (If a house is worth less then the first mortgage, the equity loans can be discharged as unsecured debt. This cannot happen if the house is worth more then the first mortgage.)
Therefore, you would want to file a Chapter 7, which usually takes 6 months from filing to discharge. However, all creditor must stop all collection attempts - including phone calls - as soon as you file the papers.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).