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Lawyer says bankruptcy won’t help me

Ladyluvvy
Valued Member

Lawyer says bankruptcy won’t help me

I'll skip the sob story, except to say I was diagnosed with an illness and the cost of the new monthly meds that are "life or death" according to my dr have put me under. I had to stop paying credit cards a year ago. Just got my first civil summons notice of lawsuit from one of them.

  I need help and cannot find it. I refuse to believe that a 64 yr old woman would be forced out of her home to pay unsecured debt. 
Someone out there knows what I should do.

 I live in NC and the bankruptcy exemptions seem low. $3500 for a car and $35k in home. My car is worth 14k paid for, and my home is worth 250k. I owe 146k. My debt a year ago was  35k and is now 42k with fees and interest. 
 If I sold my home I will never be able to get into another. My credit is ruined FICO in 500s. 
 Lawyer says I will not benefit from bankruptcy, 7 or 13 either one. 13 because I can't make payments my total spendable income going to meds. 
 I have too many assets with 100k in equity. After costs, I might realize 84k. Paying the debt off I would be homeless with 42k for my retirement having lost the only investment I have.
  I won't qualify for a home equity loan.

 If I must sell my home it will be a bitter pill to swallow. 
 Do any of you have any ideas? Options are a great stress reliever and I could use one or two. Thanks in advance for considering my situation.

 

Start 1/9/15
Current 9/13/18 EQ 740 TU 701 EX 773
Goal 800 800 800
Message 1 of 26
25 REPLIES 25
Cowboys4Life
Regular Contributor

Re: Lawyer says bankruptcy won’t help me


@Ladyluvvy wrote:

I'll skip the sob story, except to say I was diagnosed with an illness and the cost of the new monthly meds that are "life or death" according to my dr have put me under. I had to stop paying credit cards a year ago. Just got my first civil summons notice of lawsuit from one of them.

  I need help and cannot find it. I refuse to believe that a 64 yr old woman would be forced out of her home to pay unsecured debt. Never assume.  Some states offer protection from that not all of them though.  I would ask the BK lawyer how possible this is in NC.  
Someone out there knows what I should do.

 I live in NC and the bankruptcy exemptions seem low. $3500 for a car and $35k in home. My car is worth 14k paid for, and my home is worth 250k. I owe 146k. My debt a year ago was  35k and is now 42k with fees and interest. 
 If I sold my home I will never be able to get into another. My credit is ruined FICO in 500s. 
 Lawyer says I will not benefit from bankruptcy, 7 or 13 either one. 13 because I can't make payments my total spendable income going to meds.   Sadly the lawyer is correct.  You have too much equity to qualify for a 7 and if you cannot make the payments a 13 isn't an option.  With that equity the trustee would be forced to sell assets to pay the debt(s) off.
 I have too many assets with 100k in equity. After costs, I might realize 84k. Paying the debt off I would be homeless with 42k for my retirement having lost the only investment I have.
  I won't qualify for a home equity loan.

 If I must sell my home it will be a bitter pill to swallow. 
 Do any of you have any ideas? Options are a great stress reliever and I could use one or two. Thanks in advance for considering my situation.

 


Who is the creditor suing you and for how much?  One option is to sell the car and offer a lower lump sum settlement.  With the number of health problems you have you should qualify for low income handicapped public transportation services until you can get another cheap vehicle.  Others may have some advice as well.  

Message 2 of 26
kilroy8
Community Leader
Super Contributor

Re: Lawyer says bankruptcy won’t help me

I would say you have to "get rid" of your assets. Give them to a relative or someone, leave yourself with nothing on paper. Otherwise, they will take it all.

 

I hope I'm wrong.

Message 3 of 26
Cowboys4Life
Regular Contributor

Re: Lawyer says bankruptcy won’t help me


@kilroy8 wrote:

I would say you have to "get rid" of your assets. Give them to a relative or someone, leave yourself with nothing on paper. Otherwise, they will take it all.

 

I hope I'm wrong.


BAD plan.  There is a 2 year look back period where all asset transfers have to be disclosed.  The BK courts and trustees are extremely wise to this form of hiding assets.  Not only will they undo the transfer but there is the potential for criminal charges for fraud.

Message 4 of 26
Ladyluvvy
Valued Member

Re: Lawyer says bankruptcy won’t help me

That's what it's looking like. If there's some actions I can do now legally that I won't be able to after the first of likely many lawsuits are filed and judgements obtained then I want to do it now. I just don't know what I can do. I don't want to be caught like a deer in the headlights and lose everything due to inaction. Neither of the attorneys I've consulted have made ANY suggestions.  I want to refinance the house and take the equity out to pay the creditors. That way I could live in the house till I die. 

Start 1/9/15
Current 9/13/18 EQ 740 TU 701 EX 773
Goal 800 800 800
Message 5 of 26
Ladyluvvy
Valued Member

Re: Lawyer says bankruptcy won’t help me

Discover card for $4300. But there will just be another card after them.

Start 1/9/15
Current 9/13/18 EQ 740 TU 701 EX 773
Goal 800 800 800
Message 6 of 26
Ladyluvvy
Valued Member

Re: Lawyer says bankruptcy won’t help me

I won't hide assets. I want to protect what I can legally. Had I known unsecured debt could so easily be converted to secured debt I never would have used the credit cards. It's looking like I'm going to have to sell my house. NC judgment power is not on consumers protection side.

Start 1/9/15
Current 9/13/18 EQ 740 TU 701 EX 773
Goal 800 800 800
Message 7 of 26
Cowboys4Life
Regular Contributor

Re: Lawyer says bankruptcy won’t help me


@Ladyluvvy wrote:

I won't hide assets. I want to protect what I can legally. Had I known unsecured debt could so easily be converted to secured debt I never would have used the credit cards. It's looking like I'm going to have to sell my house. NC judgment power is not on consumers protection side.


What about a reverse mortgage?  I do not know much about them but you could look into that before selling the home.  

Message 8 of 26
jmw1
Frequent Contributor

Re: Lawyer says bankruptcy won’t help me

Most people who I know are very poor and need medications are on their state Medicaid program paying next to nothing for meds. They are also getting food stamps and other assistance as well.  If you can get insurance to pay more of your medication costs, you may be able to do the 100% repayment plan on chapter 13 over 5 years to keep your house. That looks like $850/month. You have to be on the 100% repayment in a 13 due to the excessive non-exempt equity. I second the suggestion on the reverse mortgage as well.

Message 9 of 26
MyDataMyChoice
Valued Contributor

Re: Lawyer says bankruptcy won’t help me

Do you qualify for any State Aide?  (SNAP, Food Stamps, Unemployment, Disability, etc...)  IF SO you may be able to become Judgement Proof without the need for Bankrupcy

 

Alternativly, 

Court is expensive for EVERYONE - 

 work with the collection companies - go into an agreement....   I can pay $100/mo    thats it... or else I may have to file bankrupcy.  (Don't tell them you have assets)

 

You mentioned INVESTMENT Accounts... are they 401K/IRA?  or Are they Cash Investments?   Retirement accounts are generally exempt.

 

 


Message 10 of 26
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