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Paul K, Esq.
Paul K, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 141
Experience:  10 years Exp., Great customer service, Prompt responses.
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I live in AL and will be moving to AZ. I have $60000.00 in

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I live in AL and will be moving to AZ. I have $60000.00 in credit card debt. I have one judgement against me from one of the credit card companies already. The cards continue to accrue fees and interest. When I call the credit card companies, I am told they have sold my debt to third parties. When I call those companies I am told they will not tell me how much I owe them. I no longer have any credit cards, only a debit card and I live only off my income. My credit rating is quite low.
I have no assets except my car, clothes, household goods and most importantly 60 acres of farmland in IL. The land is in a trust with my siblings. I can only sell the land to one of my siblings. I cannot sell it to an outside party. So the value of the land to me is quite limited.
My income is limited and I do not believe I can pay off the debts. Making payments barely covers the interest and fees. I do have to pay rent and buy food.
I would like some advice on the best way to proceed to get out of this mess. I am considering credit counseling, debt relief programs, and bankruptcy. Would any of these avenues help me?
I would also like some advice about what to do with the land. I do not believe either of my brothers would be willing to buy the land from me. If they would I would use the money to pay off the debts. If they will/cannot, I am thinking about giving the land to one brother and excluding it from any bankruptcy process.
To summarize, how should I best proceed to get out of the mess I have made for myself?
Will the land be an issue if I were to file bankruptcy? Do I need to dispose of the land before filing bankruptcy?
Thank you for your advice and help.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Paul K, Esq. replied 1 year ago.

Paul K, Esq. :

Hello, my name is XXXXX XXXXX I would love to assist you. Give me a moment to research your issue and I will answer promptly.

Paul K, Esq. :

Credit counseling and debt relief programs can work, but it sounds as if your income level is a bit low, unfortunately.

Paul K, Esq. :

On $60,000.00 worth of debt, it would be hard to pay that off with all the interest and fees added in.

Paul K, Esq. :

In addition, many debt relief agencies are scams and end up charging you a ton of money and you do not get any real benefit.

Paul K, Esq. :

In fact, a recent study was conducted and only 1 out of every 10 people ended up getting their debts cleared up through a debt relief agency.

Paul K, Esq. :

Bankruptcy may be the best way to go depending upon the value of the land and how the Trust was set up.

Paul K, Esq. :

You do not "own" the land, but rather are a beneficiary of a trust, so it may work out to your benefit somewhat.

Paul K, Esq. :

What do you think the land is worth?

Customer:

Before RE collapse and recession it was valued at $4000 an acre or $240,000.

Customer:

Now maybe half that.

Paul K, Esq. :

Ok, Bankruptcy could be your best option.

Paul K, Esq. :

There are two BKs, Ch 7 and Ch 13.

Paul K, Esq. :

In a Ch 13 they do not take or make you sell land, but rather set you up on a payment plan to pay back some of your debt.

Paul K, Esq. :

Without reviewing your Trust documents it is hard to completely advise you.

Customer:

Does the process reduce the amount of debt?

Paul K, Esq. :

I would avoid debt relief companies

Customer:

That seems to be the sense I am getting.

Paul K, Esq. :

Yes in a Ch 13, lets say they have you pay $200 a month for 3 years, or $7,200.00. The remaining money would all be erased.

Paul K, Esq. :

I advise getting your trust documents together and setting up a free consultation with an attorney

Paul K, Esq. :

It wont cost you anything and they can look at the Trust info and advise you

Customer:

What about Chap 7?

Paul K, Esq. :

There is a good chance you can even do a Ch 7 and walk away from it all.

Customer:

Without impacting the land in Chap 7?

Paul K, Esq. :

It all depends on the Trust and whether it is irrevocable and other aspects.

Customer:

OK sounds like I need to set up an appointment with an attorney.

Customer:

Thank you for your help and advice.

Paul K, Esq. :

So that is why a free consult would help, because reading your trust docs would help a local attorney decide which is best for you

Paul K, Esq. :

Ch 7 vs. Ch 13

Paul K, Esq. :

Either way you can save alot of money, stress, and walk away from most, if not all of your debts

Paul K, Esq. :

If you have further questions, please let me know!

Paul K, Esq. :

Have a great week!!!

Paul K, Esq. :

Here is some info:

Paul K, Esq. :

he irrevocable trust may provide asset protection even in the face of a Chapter 7 bankruptcy. In an irrevocable trust, the settlor cannot be both trustee and beneficiary and the assets are no longer in the settlor's control. This removes them from the creditor's reach. However, if the debtor creates the irrevocable trust for the purpose of hiding assets or otherwise defrauding creditors, the court may still subject the assets to the bankruptcy proceedings. It is critical that a debtor speak to an attorney and seek legal representation when deciding how to proceed.


Paul K, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 141
Experience: 10 years Exp., Great customer service, Prompt responses.
Paul K, Esq. and 3 other Bankruptcy Law Specialists are ready to help you

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