When it rains, it pours. . . . This OH/MI transition is taking its financial toll and we've decided to consult a bankruptcy attorney. I hope things will work out but I am concerned about one thing because I think we would have to file for Chapter 7 and NOT Chapter 13 because my DH's store is operating at a loss right now and we simply don't make enough to make payment arrangements. Here's what's bothering me: I have a 1931 Ford Model A Tudor that I bought with paper route money when I was only 14 years old. Obviously, it has alot of sentimental value, but it's not the practical car to choose if I'm only allowed to keep one vehicle. I am thinking of selling it to my mom. Someone told me, though, that it could be considered a "fraudulent transfer" if it occurred after we started having trouble. (This past month is the first month that I have not been able to pay some bills so right now we are only 30 days past due on some things). Have any of you known anyone to sell such possessions in similar circumstances and what was the outcome? I know the attorney will be able to give me some insight, but I'm so worried that I might want to sell the car to my mom before I consult with the attorney. Any input would be appreciated!
I am thinking they mean by "fraudulent" is if you run your credit cards up as much as you can buying steros, clothes, jewerly before you declare bankrupsty. That would be considered a no no. Its owned by you free and clear right? If so they will more likely think you were trying your best to get out of debt when trying to sell your car for cash, I would do it before you declare bankrupsty for sure and I wouldnt say you got a whole lot for it either. A little lower then bluebook value. Do you have the title already? Not sure how that works on transfering it and how long it will take in your state. Will it have a date? I have never transfered a car before guess you need to check into that for your state too. Not sure if they will ask what you did with the money I guess it depends on how far away after you declared bankrupsy maybe? Suggestions only....all of this...Sorry I am not much help but at least you can think on this a bit more. I am no lawyer but I have had family go through this before. Each state law is different and it changes so much the rules. Do a research for Ohio laws on bankrupsy. Good luck Sam
I know a couple people who sold their motorcycles and cars while in bankruptcy. I am not a lawyer but from my understanding, as long as the courts do not have claim on it, then it is yours to do whatever you want to do with it.
Well, you did not file as of yet, so what is keeping you from selling it to your mom now? You can sell it to her now and then file just to secure your vehicle.
A friend filed once and she said anything that she sold 6 months prior to her filing for br she had to pay the courts the value for. She also said that there was question about consulting an atty and doing anything 6 months prior to filing to liquidate assets. That's just what she told me, hope that helps. Something like that would not be protected and the trustee would sell it to liquidate it or you have the option of buying the property from the court. They in turn take that money and divide with your creditors. She said when you file you show your underbelly and they more less don't let you keep much of anything except what is protected. She also said that someone found out that they filed and wrote the trustee and offered to buy some of their property and the trustee let them buy it. So they had to make things available to this person who wanted their property because the guy had the cash. So keep your br filing under wraps so you don't get someone who feels like being ugly. The guy wanted their vehicle and even though they had protection for the vehicle, the guy wanted and so they were left carless.
I understand....I know this isn't easy. My heart goes out to you. I am speaking from personal experience here. I was forced into bankrupcty after my divorce. Is there ANY other way besides bankruptcy? Have you considered debt consolidationg? Have you considered looking into Dave Ramsey's classes? http://www.daveramsey.com/shop/Dave_s_Library_C136.cfm I took one at church and it was awesome. You definitely need the support group though. There is much to read at his website too for free. I would say if you want to keep your car, sell it to your Mom right away. I would not wait much longer. You can say that you needed the money. My guess is that you are giving the money directly back to your mom anyway. Have her write out a check and you cash it and then give her the cash back. This shows through the banking system that the transaction actually took place. I wouldn't sell it for too much because they might want to know how you spent the money. Maybe $500 or something. This way, you can say you used it to buy groceries and gas to just get by in daily life. You wouldn't have to show a bill you paid on. KWIM? You will have to have the title changed over to her name but this is easy to do at the court house and doesn't cost too much. Your Mom can hold the car and give it back to you after things have settled down. The bankrupcy laws have changed since I filed so I am not positive of all of the changes. Honestly though, sell the car to your mom on paper BEFORE you even consult a lawyer. This is in your favor and once done cannot be undone. (this is just my humble opinion ) Best of luck. :love: I will be praying for you as you make these difficult decisions.
Good advise. If you do sell it, be sure to keep receipts for expenses in case they want you to prove that you used the money to pay bills. I read an article that they are making it tougher to file.
I second Nicoles advice about Dave's website. Filing for bankrupcy is not a get out of jail free card. Ask people who have gone through it, they will tell you how much it sucks. I remeber my parents banckrupcy and I was only 4 at the time. And if you are only a few months behind you might just wait a little while. Make a budget for this month then take care of the basics first: Food, shelter (house payment, ins, lights, gas, etc) clothing (minimal only those things you have to have), transportation. After those are done the others can wait. Credit card companies will call and harrass you but they will take months to years to come after you depending on the balance, and they can take money and such but not your house or your kids. If you can listen to dave online, or on the radio you will hear tails of people not paying 5k balanced credit cards for 2 or 3 years and not getting taken to court. You pay those people who can take things from you that you need. Your house, Your Car, Your store etc. You will think alot different if your kids are fed and your house payment is paid on time, it is not nearly as stressful and your mind will work better. I don't know your exact situation but remeber student loans are not bankruptable. And if you are not going to loose your house, and cars then you are most likely just filing on credit cards, and personal loans right? If they do foreclose on your house or cars they will be sold at auction then you will be held for the difference of the price. Which 99% of the time you would have been better off selling it yourself. We have bought a few vehicles at repo auctions for way less then blue book. As for your question. My thought is that they will go back and make you really sell the car. If you sell it to a family member for less then blue book or retail value then it looks mighty suspicious. You could get your mom in trouble for assisting you in this. I know that happens with Medicare benifits, it is a felony. If you sell it to her it needs to be legit all the way around. As a third note that might make you upset. If you are not willing to outright sell the car, then you might need to rethink the bankrupcy. You and your husband signed papers saying that your would pay back the money, you promised, gave your word that you would do all you could to pay it back. It is a legal document. If you are not willing to do that, then you must not really take a promise that far. Before you blow me off let me tell you a little story about me. I have a 1966 Chevy Pickup that was given to me on the day I graduated from High school by my extra dad. He drove it from Co. to TX for me. A few months later he was hit by an eletric shock that took all of his memory away from him, and nearly killed him. He doesn't remeber me, or taking me under his wing during some really hard times in my life. That hurts alot, I miss him so much. I put my truck up for sale to pay some bills we had. I cried each time somebody came to look at it. My dh had to show it because I just couldn't do it. It was the last thing I had to remind me of my dad, the good times we had had, the love he showed me. I think God honored my willingness to give it up and provied some other money before the truck sold. So just think about the real need for the car, and consquences of filing bankrupcy. If you are not mad at me for the last note and need some help let me know. I am a dave junky, I have taken, taught the class, and listen to his show almost daily. We have followed his plan for almost 6 years now. My inlaws are finacial councelors and I can always ask them questions if there is something I don't know.
I would tell you to look around your house and look into selling some stuff on eBay or Craigslist. 30-days overdue isn't THAT big a deal - most people you can call them and talk to them 1st before you declare bankruptcy. We had to go after someone in court for money who declared bankruptcy and I mean to tell you it was ruthless from our end (he had bought our computer store - 12 years of work from our life and then ran it into the ground and declared b-ruptcy). Lawyers aren't nice when you get into that realm and years later it still haunts this guy (I know because I ran into someone who knows him and didn't get their money yet) Work with the creditors - start cutting up credit cards. Pay cash. I couldn't get through Dave Ramseys book - but that was just me because I don't do our finances and honestly my husband does a pretty good job. But I am having him set up a checking account with a debit/visa card (no overdraft) so I can just use that instead of regular credit cards and I don't like carrying a lot of cash around. But I personally sell books, cd's, videos.... anything that is quick for a couple of bucks if I need it. Good luck with your decision. It's scary - and I can't help you with the car choice because I don't know. I just hate it when people do the extreme when it might not be needed.
I think that it depends on your state laws. I am pretty sure they can NOT do it here in TX. I am also sure that most states that do allow them to garnish your wages require that they take you to court to do that first. But by that time (years down the road) you can offer a settlement (30% of the debt owed maybe less?), and get it most of the time. If the CC won't deal with you then you can wait and call the lawyer listed on the garnishment suit and deal with them. Most of the old debts are sold to Collection agencies, who are turkeys and a pain to deal with, for cents on the dollar. If you get that far where you are getting collection calls you really need to listen to Dave so you can know when they are breaking the Federal Fair Debt Collection act (which they do all the time) My SIL was messing up and we were getting collection calls for her stuff. I had to threaten one of them with a lawsuit before they backed off, and left us alone. We had nothing to do with her debt other then the same last name. Here is a link to Daves advice and a call where he talkes about Credit card collectors. http://www.daveramsey.com/etc/cms/index.cfm?intContentID=6557
I will definitely check out those links, and I am still holding onto hope that things will work out. I think what has us beaten down is that we would not be in this mess if my DH's brother had honored his promise to repay us the $26,000 we loaned him to get started in this country. He was supposed to turn over his income tax refunds to us as a way to pay us back and out of a total of $10,300 he has gotten over the last few years, guess how much he's given us? $ZERO, ZIP, ZILCH. Not one penny! Just last year, when my DH reamed him over for not paying us anything, he had the nerve to say, "Don't worry brother, I'll lose my house before you lose yours." Well, guess who used OUR money this year to refinance his house and basically save his A**? I have never experienced a hatred and loathing like I now have towards my BIL. Then my DH's dad was diagnosed with colon cancer last winter and we had to pay $10,000 to basically save his life because the healthcare system in his country is so backwards. Then, of course, there was my surgery which wasn't covered by insurance. We have tried to sell some of our assets and no one is buying. I tried to sell my car two years ago to pay for my surgery and no one felt it was worth even $5,500! We have more recently tried to sell off some other significant assets and no one is buying anything in this economy. So, sure, we made promises to repay and I believe in taking responsibility for ourselves but we've also been totally screwed by people we were stupid enough to trust and by the current real estate market and economy. I cannot regret having my surgery nor helping my FIL. For that, I am willing to take these "irresponsible" measures. What bugs me is that most people will assume I was out buying Gucci bags and now I want the system to absorb the debt.
I'm with you on the in-law thing! My house is always open - except now to my SIL who I think abused us for 2 years by paying minimal rent and would use my stuff etc. Luckily she is paying back her loan because I told my husband to cut her off and we kicked her out Gotta love families!! Heck even my MIL had no idea why we were charging her rent!! AND her work was PAYING for it.... Look at little stuff to sell to make ends meet. That's my biggest thing. Lots of little stuff eventually ='s a big thing. Good luck!! I know you feel stuck - but it will work out. It honestly doesn't seem you are at ropes end yet - it just feels that way
Rule #1 about loaning money: NEVER loan more than you would be willing to give outright. I don't care WHO it is, there's always a chance you'll never see it again. I also understand that it's your BIL, and it's you DH's call as to loan or not to loan.
Yes, I know and I already have a list of "small" items that might bring in a larger chunk of change that I'll list on Craigslist as soon as I get back to Ohio. I don't want this to sound like a bunch of WAH-WAHing, but because it bothers me that people might think we are just trying to take the easy way out, I'd like to add that my DH was completely without an income from the end of September 2007 to April of this year because he was ineligible for unemployment. (Some of you who were at the Ohio gathering at Salt Fork last year might remember when he called me to inform me there would be no unemployment benefits). It's kind of hard to budget anything when the income is $0!! We want to rent our Ohio house, but don't have the money to do the things we need to do to it to get it "rentable". Someone just told me that even the (reputable) consumer credit counseling place might not be able to help us because we just don't earn enough to even work out a pay-back plan. I still would like to talk with them, and of course, check out the suggested links that you ladies have mentioned. It's just all so overwhelming to have so many things backfire at the same time. As for relatives, you'd better believe I will never fall into that trap again. It's really only my DH's family because they think money grows on trees in America. But aside from health issues with his parents, I'll NEVER condone helping any of them again. But as it stands right now, we can't even help his dad if his cancer should flair up again. But, we can only do what we can do and I just hope we'll pull out of this somehow.
So sorry to hear that you are dealing with this, yes, I remember your dh calling you at Salt Fork. It must be really hard to deal with when you were financially set and your in-law did this. Have you talked with him about this? Did he sign a note that he would pay this back. Will continue to pray for your situation.
I am sure you are upset with me. I just wanted to make sure that you had covered your basis, and really thought about what bankrupcy covers. There are alot of people how do go out and file just because they shop to much. Or because they get to overwhelmed. I understand the family issues too. I mean what are you to do let you FIL die because you don't loan money to family. I think not!! Dave has a saying that when you do something with money that isn't smart he calls it stupid tax. I have some marks from stupid tax, and just about everybody else does as well. Some people's have more zero's on the end then others do. Thats what I would call the loan to your BIL. I would encourge the Craigslist to sell the little items. It would make moving much easier if you didn't have to move all that stuff right? You can have a virtual garage sale. Sale a ton of stuff, even it if just makes a dent in your bills it will help. I feel for you right now. There are so many things going on in your life that just one of them would make you feel like you are drowning, and you have a whole pile of them on top of you right now. And your husband is in another state, not able to help with the day to day. I can't imagine the stress and emotions that you are dealing with right now. I know you are worried about your kids, and the stupid CPS, the store, moving, your house, your finaces. WOW that is a ton of things to be under. Not to mention the normal day to day things like feeding the kids, homeschooling, and grocery shopping. Could you sell the house in Ohio for what you owe on it. Since you are moving anyways it would be a way to get out from under at least that payment. If you have some equity and the market is not flat you might make a little? I am thinking that would be a better idea then trying to rent it in this situation. My orders for the day. Breathe in breathe out Take a hot bath (or shower), lock the kids out and tell them that hanging out at the door doesn't count as leaving you alone. Just to gather your thougths Then make a list of things to do in order of most imporant to least. Start at the top of the list and don't worry about the rest of it until you get there. I will often use another paper taped over the bottom part of the list so I don't freak out. You can do it, you can make it through this trying time. You just need to take small bites and not try to eat the whole elephant in one bite.
No, aggie, I am not upset. I took your post to be sincere and I appreciate your suggestions. It's just that we have always tried hard to be responsible for ourselves so I just felt the need to let people know that alot of unexpected stuff has happened in the past year or so. As a matter of fact, one of the attorney's websites that I came across really made me angry. It had the tone of "shame on credit card companies for letting you have so many cards. You deserve a fresh start." I hate that kind of blame-shifting. I wish we could sell our house for what "we" owe, but the money we gave to my BIL was our equity line, so if we have to roll that in, no way would anyone buy our house. We have a leaking foundation and a ton of cosmetic changes to make. The foundation work, unfortunately, wouldn't be recouped because it would bring the house up to where it's expected to be. If it were a kitchen re-do, then maybe it would pay off. But how many people walk up to a house and say, "Wow, look at that stunning foundation! It's definitely worth the money!" I think the amount of work needed on the house to even rent it is part of what is having us feel so overwhelmed right now. As for talking to my BIL, we've been there, done that. All he keeps saying is "I'll do whatever it takes" but when he actually gets money he doesn't turn it over. I feel like saying "Hey, pal, that's what it takes!" At one point he said to my DH (and this is the chauvinistic cultural crap coming through), "What's your wife mad about. This is between you and me." I guess he didn't realize that in the good 'ole U.S.A women actually go beyond the 8th grade and end up owning houses right along with their husbands. And even if my name wasn't on the equity line, you'd better believe I have the right to be angry that somebody is ripping my husband off!!But I fault my husband a bit for this because he never let me sit down with him and his brother to discuss this matter. I guess it would've been too much for his brother's pathetic little ego. As a matter of fact, when his brother still lived with us and foolishly bought a fancy cell phone plan instead of continuing to pay us for his share of our budget international calling plan, and I insisted on telling his brother how foolish he was, it caused THE biggest, most serious fight my DH and I have ever had. But, I am digressing and am just starting to ramble and vent. . . I know we chose to over-extend ourselves, but the reasons at the time weren't so fool-hardy. Live and learn. . . .
Be careful with those so called credit counselors, a lot of the credit card company’s won't deal with them, or you give them money and the credit card company’s will still bug you because they are not sending them out fast enough or contacting them like they should. I had a friend join a Christian credit one and they messed her up even worse. I told her to take care of it herself just takes some research and negotiations I am a big Dave Ramsey Fan myself and got out of debt with him with his help but some of my family members because of medical problems and no jobs they had no choice after awhile. Love Dave but sometimes I think he forgets how painful and stressful it can be not only to be in debt but in pain too. My parents were one of them. My mother was so stressed out. I finally helped them declare bankrupsy, I tried helping them at first with budgeting but that was more stressful to them when they saw the total amount owed from medical bills and credit cards from having to buy meds and daily living supplies, all they had was SSN they never had a retirement fund. Can you imagine looking into your elder parents eyes having to tell them they need to go on a budget but then realize that there is more they owe then what they bring in and there is nothing more they can budget even if they wanted too. Sometimes it’s for the best to declare. After that she was stress free and moved over to live with us in their own cottage house and we helped take care of them. She spent a happy two years with us before she passed away this last June from Cancer. I know she was happy not to leave my dad stressed out with all the bills and debt. Sam
