RE: Financial Bind

From: Greg.Panayotti@swissbank.com
Subject: RE: Financial Bind
Date: Tue, 23 Jun 1998 13:47:54 -0400

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     >Date: Fri, 19 Jun 1998 10:43:52 -0400
     >From: Jack <jack@mailzone.com>
     >Subject: Financial Bind
     >
     >Hi -
     >
     >I have found myself in a very bad financial situation and would like
     >suggestions from anyone who may wish to help.
     >
     >I have considered bankruptcy, but I want, no need, to keep my house.  I 
     >think I understand that Federal bankruptcy laws may allow me to re-commit 
     >to the mortgage lenders and keep my home, thereby excluding it from my 
     >assets for liquidation.  However, I have also heard that if your state has 
     >established their own exclusion rules, then those are the ones that are 
     >followed.  I believe that my state, Maryland, has their own rules, but I 
     >cannot find out if my home can be excluded.
     
     Jack - sorry to hear about your situation.   From what I understand ( I 
     went to a bankruptcy lawyer years back for my father when he left work 
     on disability also with stacks of medical bills.   If I am wrong I hope 
     someone will correct me.)  - bankruptcy is a federal set of laws - not a 
     State set so it's basically the same in all states.   
     
     The bankruptcy you're looking for (Chapter 7 I believe) allows the 
     discharging of "unsecured" debt.  (i.e. credit cards, medical bills, etc).  
     This does NOT include your mortgage or anything SECURED - so you cannot 
     "exclude" your home.  BUT here's the important part:  The whole 
     point of liquidating assets (taking your home, possessions, etc) is to 
     sell it and pay off your debt with it.  It's not a punishment.  So if 
     your house is worth say $200,000 and you owe say $150,000 on it they will
     not take your house because it's not worth it.  They need to sell it
     (which costs money) - the bankruptcy administrator needs to get paid, 
     taxes on the sale need to get paid, etc ... so there would be nothing 
     left after the sale to pay off any debt.  
     
     Also, if you own the home as a married couple, each of you gets a $15,000 
     excemption to use in bankruptcy which could be combined to exempt $30,000 
     in equity on your home if that's what you choose to use it for.  In a real 
     sense, the more you owe on your home, the better your chance of keeping 
     that home through bankruptcy because there is nothing to gain by the sale
     of it.   ** This is , of course, provided you are keeping current on your 
     mortgage! **  Bankruptcy can stall a foreclosure, not prevent it.  
     For you, it sounds like if you got rid of that mountain of credit card debt 
     you could probably pay your mortgage and keep your house.  Keep in mind
     they *will* take any cash you have in the bank in bankruptcy to pay 
     off your debts.  
     
     This is what I remember but please, please contact a competent bankruptcy
     attorney in your area.  Initial consultations can be as little as $100 
     to discuss your situation and to see if bankruptcy is an option for you.
     
     Good luck.
     
     G. Panayoti
     
     
     
     




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