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dylatess, Attorney
Category: Bankruptcy Law
Satisfied Customers: 5155
Experience:  37 plus years of experience specializing in bankruptcy law
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I am helping my mother in law on her finances as she is way

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I am helping my mother in law on her finances as she is way in over her head on bills. She tried to file for chapter 7 BK but wont qualify due to the fact that she makes 80k a year w2.
One of her biggest issues is she has a boat that she owes $125,000 on. They just received an offer on the boat for $114,000. She has no money to pay the bank for the difference in order for them to release the lien on the boat. They did say for her to write them a letter explaining her situation and what she would like for them to do. The lender is Bank of the West. We are trying to find out what if any options she has with the bank. Do they ever waive the difference? could they release the lien and issue a new note with her for the difference? What is the best way to word the letter in order to get the most favorable outcome? Any advice would be greatly appreciated.
Over 34 years, I have assisted my clients with debt problems having filed more than 32000 Chapter 7 and Chapter 13 Bankruptcy petitions.

Please note that similar to a short sale on a house, a lender will accept less on their note providing that you can make a strong argument of why they should do so. Accordingly, along with your letter, please include a list of expenses and income which documents the hardship she will have in trying to pay even a reduced payment. Also note, upon acceptance by the bank, the bank will still issue your mother in law a 1099 for the difference that they did not collect. And this is reported to the IRS to which she will owe taxes on the amount as the IRS looks at this as money she did not have to pay but is still taxable.
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