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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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My situation is as follows : I live in Michigan. My house is

Resolved Question:

My situation is as follows : I live in Michigan. My house is worth $110.000 i owe about $77.000. I own outright a lot adjacent to property worth about $8,000. I have 3 cars for my son of 17 and I, they are worth maybe $7.000.00 all together. These are all my assets. I have total of $52,000 in credit card debit. I owe $4.000.00 debt on Exes car loan that I have to pay thru credit union. I also owe my brother $5,000. I have considered selling him the adjacent lot property to pay him.
My income is a $22.000 pension minus $3,600 alimony. I made additional $14,000 from a regular job. I have been borrowing cash on 1 card to pay another basically vicious circle demise since divorce. Payments are just going up on c cards as interest rates go up only to get worse. I am afraid if I file bankruptcy they will make me sell all. Any advice would be great. I really don't want default on CU ex wife loan as all my banking is done there and the house as i'm only paying $400.00 a month. The House is Key !!! Any suggestions.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 1 year ago.

cfortunato :

Hi - my name is XXXXX XXXXX X'X a Bankruptcy and Consumer Protection attorney here to assist you.

cfortunato :

Have you lived in Michigan continuously for the past 2 1/2 years? If not, where have you lived for the past 2 1/2 years?

cfortunato :

Also, what are the individual values of each of the 3 cars?

Customer:

Hi Chris,

Customer:

Yes lived in michigan whole life.

cfortunato :

Thank you for your response. Given the information you provided, you would be able to file a Chapter 7 Bankruptcy, because your income is low enough to qualify for a Chapter 7.

Customer:

98 Buiick Park ave $2,800

Customer:

98 Ford Escort $2,500

cfortunato :

If you file a Chapter 7, you would be able to keep your house, because the your house is worth less than $35,000 more than the balance on the mortgage.

Customer:

2000 Ford Windstar $1,300

cfortunato :

However, you would probably have to give up at least one - and possibly two - of your cars.

cfortunato :

You would also have to give up the lot. I know you said you were thinking about using the lot to pay your brother the money you owe him. However, this could work only if you then waited one year to file.

cfortunato :

Because the "lookback" period for paying creditors who are relatives is one year. This type of payment is called a "preference", and "preferences" given to relatives can be taken back if the preference occurs less than one year before filing a Bankruptcy.

Customer:

Would they have any rights to my pension? Whats the basic difference between chap. 7 and 13 ?

cfortunato :

When asking about your pension, are you referring to the principal - such as an IRA or a 401K - or are you asking about your pension income?

cfortunato :

With a Chapter 7, debts are discharged without having to pay anything to your creditors. With a Chapter, you have to pay all disposable income (gross income minus allowable expenses) to the Bankruptcy court for up to 5 years.

cfortunato :

This is the reason that a Chapter 7 is the preferred type of Bankruptcy.

Customer:

It is a fixed "pension" thru state of Mich. pension system.

cfortunato :

That type of pension is exempt from creditors and from the Bankruptcy court. In other words, the Bankruptcy court would not have any rights to your pension.

cfortunato :

("Exempt" means protected.)

Customer:

If I took on extra work and increase my pay by 25 % would this jeopardize my current situation to file ?

cfortunato :

Does your son live in your household with you?

Customer:

Yes 100 % of the time.

cfortunato :

For a household of 2 in Michigan, you can gross up to $4,296 per month to qualify for a Chapter 7.

cfortunato :

This would include your pension in addition to any money you earn by working.

cfortunato :

So, you can earn an additional $1,296 per month and still qualify to file a Chapter 7.

Customer:

Well thank you for all the info. If I wanted more question., would be able get back to you ?

cfortunato :

You're welcome! And yes, if you would like me to answer any additional questions, just address them to me (cfortunato).

Customer:

Thanks again.

cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience: Bankruptcy professor.
cfortunato and 3 other Bankruptcy Law Specialists are ready to help you

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