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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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My question is , do we have any chance of being approved for

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My question is , do we have any chance of being approved for a ch 13 bankruptcy in PA under these circumstances... we have approx 80k or more in debt from personal loans, credit cards and a repossession. I also have approx 100k of medical bills. We had our home foreclosed on about 5 months ago with a 1st and 2nd mortgage. The loans, CC and repossession date back years. In Jan of 2010 I was involved in an accident that left me with a Traumatic Brain Injury among other issues. We settled with my workers comp this past April and after attorney's fees we received 160k. With that we purchased another home free and clear. This happened the month before our old home was sold through a sherrifs sale. We did try to negotiate to purchase the original home, but did not get any where and bought the new home, leaving us with roughly 7k. A few weeks ago we settled a personal injury suit from the same incident and after attorney's fees and workers comp lien we received 75k. With that we paid off a family loan of 6,500k. With the majority of the remaining money we plan to fix up and update our new home, making things more easy for me, this will be almost 50k and with the remainder we hope to purchase a car for me (we do own one, co-signed with an in-law) and still paying for. I am assuming a Judge would not accept a Bankruptcy with us having this money, but want to know the truth form an attorney. My wife is not working and has been unable to due to my injury and caring for two children under 3. I have been awarded SSI benefits a few months ago, which is at present our only income. Thank you for as much info as you can provide.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.

Hi JACustomer,

1) What is your total gross household monthly income?

2) Is there any other income in the household besides SSI?

3) What is the current market value of your home/

4) What are the balance on both mortgages?

Customer: replied 5 years ago.
1 i receive $1400 ssi and an addional $350 for my children.
2 no other income
3 approx $150,000
4 the mortgages were on the home that was foreclosed on. The 1st mortgage amount rose to about $200,000 with late/attorneys fees before it was sold at sherrif sale. The 2nd mortgage was about $ 42, 000

Our current home is owned mortgage free
Expert:  cfortunato replied 5 years ago.
If your house was already foreclosed, why do you want to file a Chapter 13 instead of a Chapter 7?
Customer: replied 5 years ago.
Did you read my entire first question? I am not insulting you, just want to make sure you understand it was Our previous home that was foreclosed on, then with settlement money we paid in full for our current home. Its not that i want to file bankruptcy, but thought it could help us protect our cuurent home from being forecloaed on, or car being taken for its equity. I have been told that a civil judgement against me could result in a lien against the home, which could allow them to foreclose on the home to pay the lien... Because here in PA there is no homestead exemption. And they could take my from our bank acct as well. With as much debt as we have, i imagine there would be more to seek judgements against us. None of the outstanding debt was securrd in any way to our house.
Customer: replied 5 years ago.
I am sorry at first i read your question as why i would want to file bk if our home was alteady foreclosed on, not why not 13 instead of 7. With our income, we could never pay off the amount of current debts in 5yrs and couldnt aford a large chunk of income to go towards it either. Please advise what/ which way would be beat for us... Thank you
Expert:  cfortunato replied 5 years ago.
I apologize for the gaff. I was in a rush this morning, but I have the time now, and I am currently researching your question. I will get back to you with an answer shortly (within 30 minutes.)
Customer: replied 5 years ago.
Ty, just wanted to be certain we were on the same page
Expert:  cfortunato replied 5 years ago.

Given the information you provided, you would not be able to have a Chapter 13 plan approved, because your total household income is too low. Your household income would have to be closer to $6,000 per month to have a Chapter 13 plan approved.


I think this is what you wanted to know. If not, please let me know.

Thank you.

Customer: replied 5 years ago.
Can you elaborate on the possibility of losing our home due to judgements and other possible remedies against it. Can we put a minor child on the deed to protect it?
Expert:  cfortunato replied 5 years ago.

Unfortunately, there is a good possibility of losing your home, as there is no homestead exemption in Pennsylvania. Putting someone else's name on the deed - whether or not that other person is a minor - will not remedy the problem, as this can be deemed a "fraudulent transfer", and the transfer can then be reversed.

cfortunato and other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.
The house would be safe if it were sold to a family memebr and put in their name, correct? How about if it were sold to a family member and the title remained in my name but also the family members? I read that a judge could reverse the sale if they believed the sale was strictly for the purpose of shielding the home, is this true. To my knowledge there is only one judgement against me for about 4k, the potential in the future could be judgements totalling close to 200k between loans, foreclosed mortgage loans, medical and credit debt. If we were to sell and transfer or change title as mentioned above now, before any other proceedings, would that help in keeping a judge from voiding the sle?
Expert:  cfortunato replied 5 years ago.

If you sold the house to anyone - including a family member - and you received fair market value for the house, that would be okay. A judge could not reverse the sale.

However, if the house was sold for less than market value, of if it were transferred to someone else's name for no value, a judge could deem the transfer a "fraudulent transfer", and reverse the sale.

It does not matter that there are, as yet, no substantial judgments in place. What matters is the money is already owed - the debt is already there.

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