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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 15890
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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if the mortgage on a property was actually part of a home equity

Resolved Question:

if the mortgage on a property was actually part of a home equity loan, can the mortgage vs property value still come into play when going bankrupt for medical bills? we have jointly gone in on this property with someone else and the other person took out the home equity loan and we don't want this to effect him. is there a way around this?
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 3 years ago.

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on

WALLSTREETESQ :

You will be filing a chapter 7?

WALLSTREETESQ :

Will the third person continue to pay the equity payments?

WALLSTREETESQ :

What is the value of the property?

Customer:

i haven't been to an attorney on this matter yet so don't know which it would be. the medical bills are much too high and we would end up leaving a good deal of debt to our children when we die. we would like to continue paying him our half of the loan the property is valued at 89,000

Customer:

it is acreage with a tiny cabin

Customer:

the property is in my husband and his brother's name as joint equal owners

WALLSTREETESQ :

How much is the equity loan?

Customer:

i don't really know since he took out more than we needed to buy the land to use for other purposes

WALLSTREETESQ :

the property in NY will be given to the bankruptcy court or will you keep it?

Customer:

we hope to keep it so he is not effected by a loss due to my husband's accident

WALLSTREETESQ :

you took out an equity loan on the NY property to buy the CA property?

Customer:

no. his brother took out an iquity loan on his condo in ca to buy the property in ny where WE live

WALLSTREETESQ :

what is the value of the NY property?

Customer:

approx 89,000

WALLSTREETESQ :

their is no mortgage or lien in NY?

Customer:

we paid approx 45,000 for it

Customer:

there is a lien due to the medical bills

WALLSTREETESQ :

What is your monthly income with your spouse?

Customer:

we live in ny state

Customer:

gross?

WALLSTREETESQ :

yes

Customer:

approx 9,000 including pension and SSD

WALLSTREETESQ :

You would have to file a chapter 13 bankruptcy due to your income levels,

WALLSTREETESQ :

Which is a payment plan bankruptcy,

WALLSTREETESQ :

Which in terms of keeping both properties is good,

WALLSTREETESQ :

in NY

WALLSTREETESQ :

Homestead Exemption (note: this can be doubled for married couples filing jointly, who own the real estate together)



  • $150,000 for property in the New York downstate area (Counties of Nassau, Suffolk, Kings, Queens, Bronz, RIchmond, Rockland, Westchester and Putnam)

  • $125,000 for property in the Counties of Dutchess, Albany, Columbia, Orange, Saratoga and Ulster

  • $75,000 for all other counties

WALLSTREETESQ :

The 2011 homestead exemption will protect all equity in your NY home,

WALLSTREETESQ :

the CA home may be an issue, depending on the fair market value of it,

WALLSTREETESQ :

but in a chapter 13, you can keep both, and reduce your medical bills significantly.

Customer:

then our children would be inheriting debt probably. this is not our home. it is recreational acreage . does that make a difference?

WALLSTREETESQ :

Yes, it does,

Customer:

if we owe approx 250,000 in bills what might we expect to get rid of in debt?

WALLSTREETESQ :

the fair market value is less

WALLSTREETESQ :

what are your monthly expenses?

Customer:

approx 3,000 or so

WALLSTREETESQ :

so you would have $3000-$4000 in monthly income after expenses are paid and taxes?

Customer:

we also have a retirement annuity that has dwindled to 77,000 but need to have this in case my husband needs care if i die first

WALLSTREETESQ :

do not touch the annuity

Customer:

i don't really know. my husband spends and spends due to his brain injury and i am always waiting for the next check to make ends meet

WALLSTREETESQ :

You do qualify for a bankruptcy, but if your expenses are only $3000

WALLSTREETESQ :

you will have a remaining amount left over of $1500-$3000 per month,

WALLSTREETESQ :

and that is the amount you would pay back in your chapter 13 plan for 60 months,

WALLSTREETESQ :

If for example,

Customer:

are u looking something up or calculating?

WALLSTREETESQ :

yes

WALLSTREETESQ :

you net $5000 after taxes

WALLSTREETESQ :

and your expenses are $4000 per month

WALLSTREETESQ :

your chapter 13 plan payments would be $1000 per month for 60 months

WALLSTREETESQ :

so you would pay $60,000 for your debt

Customer:

do they give any room for inflation? i feel things will double in expense through that period of time

WALLSTREETESQ :

yes, you can change your plan later if your expenses increase, and lower your payments

Customer:

how easy is that to do?

Customer:

especially after the changes with the bush adminastration and what is happening in the country now

WALLSTREETESQ :

it is not too bad,

WALLSTREETESQ :

do you have any children living with you?

Customer:

do they allow any room for unexpected expenses? children are grown but we buy things for grandchildren to keep them clothed and shoes on their feet

Customer:

do they look over bank accounts to see where money goes?

WALLSTREETESQ :

yes, when you determine your monthly expenses, you list everything you spend on,

WALLSTREETESQ :

food, gifts, car, clothing, etc.

Customer:

are things taken into consideration even though the grandchildren don't live with us?

WALLSTREETESQ :

yes, if you give them gifts, or anything else that is considered,

WALLSTREETESQ :

Your expenses may end up around $4000-$5000

WALLSTREETESQ :

then your monthly payment can be $100-$500 or even less

Customer:

how would i prove that i pay for many things for them without effecting them in any way financially like food stamps or something. we live in steuben county. the poorist county in the state. there are literally no decent jobs here for people

Customer:

also, i am a nurse but have had to stop working to be with my husband since his injury

WALLSTREETESQ :

The bankruptcy court may ask for evidence such as checks,

WALLSTREETESQ :

in most cases, if the amounts are reasonable the trustee will not ask,

Customer:

i have 7 grandkids due to twins running rampantly thru our family. we are all twins

Customer:

what would be considered reasonable to a court

Customer:

and would it matter that i have had to stop working due to his brain injury?

WALLSTREETESQ :

a fe hundred is reasonable,

WALLSTREETESQ :

If you quit your job, that may help you

WALLSTREETESQ :

as your income would be less,

WALLSTREETESQ :

and you can file a chapter 7, and get rid off all your debts,

WALLSTREETESQ :

with no plan

Customer:

how would this effect our credit which is pretty bad now? what about effecting his brother by possibly losing that property?

WALLSTREETESQ :

this would hurt your credit, but not too much if you have bad credit already

WALLSTREETESQ :

in a chapter 13, you can keep the CA property and the brother will not be harmed

Customer:

the income is without my job since i had to quit due to his accident

WALLSTREETESQ :

he makes $9000 a month?

Customer:

approx, yes including pension and SSD

Customer:

do they consider the SSD

WALLSTREETESQ :

SSD is not considered,

Customer:

about 7,ooo

WALLSTREETESQ :

However, the law is constantly changing in this regards,

WALLSTREETESQ :

ection 707(b)(2) of the bankruptcy law (the “means test”), as well as section 1325(b)(2), exclude social security payments from consideration in a debtor’s budget in either chapter 7 or chapter 13. This means that social security benefits ought to be excluded from consideration in any consumer bankruptcy case, whether as an asset of the estate, or as income for the chapter 7 means test, or as income for funding a chapter 13 plan. It even should excluded from consideration for section 707(b)(3) motions, where the U.S. Trustee attempts to force debtors to convert to chapter 13, since the money can’t be used for creditors anyways under section 1325(b)(2).

WALLSTREETESQ :

You need to speak to a local bankruptcy attorney and go over your monthly income, and expenses in detail,

WALLSTREETESQ :

in my opinion, you may qualify for a chapter 13, payment plan, and keep all property

WALLSTREETESQ :

or you can file a chapter 7, and get rid off all your debts,

WALLSTREETESQ :

and keep the property

WALLSTREETESQ :

A chapter 7 is best, XXXXX XXXXX your income is mostly SSD, it should be possible

Customer:

should i go to a city area to find someone who only deals with bankruptcy

Customer:

or do i need to stay within my county

WALLSTREETESQ :

Stay in your County, but it does not really matter,

WALLSTREETESQ :

A bankruptcy attorney is needed, and in your case, an expert, as you have several issues and a large medical debt.

Customer:

thank you for your time and letting me pick your brain. i like that u work for unions as my husband was a boilermaker for 34 yrs

WALLSTREETESQ :

His Union may also have a legal plan, that would help him as well,

WALLSTREETESQ :

Good luck,

Customer:

i will talk to them...thank you very much

WALLSTREETESQ :

If satisfied with our service please press the accept button so we can receive credit, if you have any more questions please do not hesitate to ask

WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 15890
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
WALLSTREETESQ and 2 other Bankruptcy Law Specialists are ready to help you

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