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Advice for filing Chap 7

Advice for filing Chap 7

Hello, wonderful people. 


I've been thinking long and hard about filing for Chapter 7 (I'm in California) and I'm about to do so within the next couple of weeks. I am about $40K in debt, with a mix of credit cards and personal loans. Through this great forum, I've gleaned such invaluable advuce and will do the following before i file: 


- Close my zero-balance credit card accounts

- Save up for a secured card so I'm ready to go after discharge 


I do have a few questions that I hope one or some of you can answer regarding property. These are basically the reasons that would absolutely stop me from filing, and just toiling and paying minimum balances until I hopefully and eventually get a better paying job. I hope to hear from you:


- I am on the deed to a home that my mom bought. It's a home she bought for cash in a retirement community. She put me on the deed so that when she passes (which hopefully won't be for a looooooong time) I will inherit the house. If I file for Chapter 7, will the creditors try to seize her home, just because my name is on the deed? 


- Also, to help me save money, my boss is letting me live in her old home for a reduced rent. I know I have to put an address down on the filing application, but I really hate to include her in any way, shape or form, even if it's just something small as listing this address on an application. If I file, I plan to get a PO Box to receive my mail, but I do know I have to provide a physical address. For those of you who have filed, how important and how public is this physical address? Will this be on her record, too? Will she know that I am filing for bankruptcy? 


Thank you for your time. 

Message 1 of 5
Valued Contributor

Re: Advice for filing Chap 7

You need to talk with a bk attorney about your name and your mother's house but it would seem to just little old me that if your name is on  the deed  you own it and its part of the bk esate and as such the trustee will sell it.  

Message 2 of 5

Re: Advice for filing Chap 7

Thanks Backwoods! I am indeed talking with a lawyer about this, but I wanted to know if there are any first-hand stories out there. For anyone else who needs this information, here's what I have: 


My lawyer and I talked about the retirement home situation. Basically to recap: I wanted to know if my mother's retirement home could be seized and sold in the event of my bankrupty. I have been put on the deed. The home is in a 55+ active retirement communuty, and is a CO-OP. 


My lawyer has said that they may try to go after the home, but there is definite proof that it is not MY home and there is an extremely good chance that it will be excluded. In the deed, it lists me as a "non-resident co-owner," and in the retirement community's long list of statements regarding this status, it says that a "non-resident co-owner" is a beneficiary status only, and it only kicks in upon death of the resident (which hopefully won't happen for a looooooooong time). The "non-resident co-owner" is not entitled to any membership rights, privileges or rights of residency. So basically, my lawyer says there is a strong case that it is not my home, and that we shouldn't worry about it. But in the highly unlikely event that the trustees do want to take the home, then converting to a Chapter 13 is also an option. 


I hope this helps anyone who may have the same questions/circumstances!

Message 3 of 5
Valued Contributor

Re: Advice for filing Chap 7

In all candor, I would sit down with your boss and tell her that you're considering filing for BK. Since she's giving you housing at a reduced rent, it sounds like you're on good terms with her so I wouldn't be afraid to do that. More generally, it's absolutely crucial to be honest on anything you file in connection with the BK, because if the judge finds that, for instance, the petitioner is holding back a credit card account because it doesn't have a balance and they want to preserve it, they could throw out the BK filing (you MUST report all debts, both secured and nonsecured. MUST. No exceptions.) You also need to provide a current, valid address at which you can be reached, which usually would be your current residence (and even if you used a PO Box for your mailing address, I believe you would still need to advise the court of your current residential address). Consult your BK attorney on these issues and all other such issues and follow their recommendations.

Ch 7 BK discharged 12/14, well along in rebuilding credit. FICO 5/1/18:TU 664/EX 697/EQ 695 FICO 8 or 682 FICO 9 (Penfed 5/18), VS 3.0 5/30/18: TU 711/EX 709/EQ 705. $71,800 revolving credit as of 3/23/18; $4000 Walmart Store Card, $4500 Discover It, $5000 Discover It #2 (new 3/12), $6000 Cap One Quicksilver MC, $6000 Amazon Prime Store Card, $7000 Apple FCU Platinum Visa, $7000 Penfed Power Cash Rewards Visa, $7300 Overstock Store Card, $10K Cap One QS Rewards Visa Signature, $15K Care Credit, $10k PenFed used car loan, $5k Navient student loan, $12.7k Lending Club loan. Resetting the garden clock from 3/12/18...
Message 4 of 5

Re: Advice for filing Chap 7

Thanks, J!


I've given it a lot of thought and I am holding off on the bankruptcy for another couple of months while I regroup. There are just too many people that I can potentally affect by this decision and I need more time to research and think about it all. In the meantime, I have secured a second job and hope to do a bit of chipping away at the lower balances to start. If it's something I think I can handle for 8-12 months, I may continue and scrap the Chap 7 plans all together. I think I may be able to do this. 

Message 5 of 5