Urgent bankruptcy question

I am actually in the process of contemplating bankruptcy. I have spoken with an attorney and have been told that with chap 7 as long as you don’t have equity in your home you can keep it if you stay current on the loan. I go to have another meeting next week so we shall see then.

I also need some advice for my nephew. He is in foreclosure on his home. Sheriff sale is May 6th. I tried to help him refinance but no bank will touch it at this point. I was told his only way to hang onto his house is to file bankruptcy. Any idea what he should file? chapter wise? How long will it take? What can he keep? How much does it cost? We are in NJ. Thanks.

2 suggestions:

  1. Get one of the nolo books on bankruptcy from the library. Find the books at www.nolo.com
  2. Check out the website www.legalconsumer.com

Did your nephew lose his job? How is he struggling paying his house? Does he have alot of CC debt? What are some of the issues with him being in such financial problems? Bankruptcy usually isn’t the answer all the time. IF he can’t afford the house and files bankruptcy to keep it, that doesn’t make much sense. Give us some more information on his financial situation, and maybe we can help.

Sometimes people can afford to pay their secured debts but not their unsecured debts which is my situation. Bankruptcy might be an answer as you can usually keep your secured property in bankruptcy unless you fail the means test and can’t come up with a chapter 13 plan.

No, he did not lose his job. He just got behind on his mortgage. He works with my brother 1 1/2 hours from his home so he stays in the town he works in from Monday to Friday and goes home on the weekends. His wife took care of the bills and hide the fact that the mortgage was in trouble. He took over the bill paying in February but it was too late. He has lots of CC debt and he took a personal loan to pay off a CC debt. Let’s just say he was negligent all around in his bill paying. Can’t call it anything else. So, if he files bankruptcy, can’t he keep his house? and does he still have to pay his mortgage?

How many months behind is he on the mortgage? I wonder why he is paying his credit cards instead of the house payment? You want to pay your four walls first, housing, utilities, insurance, transportation, then all of the credit cards are last and if he can’t pay them, then they don’t get paid.

He can file chapter 13 and keep his assets. He’ll just have to work out a plan to pay off all or a portion of his debts. A chapter 13 does not require the liquidation of his assets, so you dont have to sell your house or expensive car. As long as his unsecured debts dont exceed $250,000.00 and his house and cars dont exceed $750,000.00. ONly your income is used to determine if he has the ability to pay. He needs to get on it ASAP if he’s 4 or 5 months behind on his house. Usually after about 6-8 months a house gets repo’d, maybe even later. He needs to contact a Bankruptcy lawyer fast if this is the case.

I would suggest that he pays his house and put the credit cards on hold though. Credit cards are unsecured debt, which means there is no hard assets tied to the debt like a house or car. Most Credit card companies will settle for less the amount of the balance of the credit card and will work with you. Although there are several Credit Card companies that won’t work with you… If you have any other questions, feel free…Good Luck with him….Hope this helps some..

Also, if your income is greater then your state’s median and you have monthly disposable income > 166.67 then you have to do Chapter 13. More details are in Bankruptcy Code 707 and www.legalconsumer.com.