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help needed for the mom-in law

Date: Tue, 04/03/2007 - 16:49
Submitted by dalfire497 on Tue, 04/03/2007 - 16:49
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I will try & make this short, but need to tell the facts. In Nov 2005, my mom-in-law called me & asked me to take her to my atty to file bankruptcy. It seems that she was taking cash advances on 1 credit card to pay another until the minimum payments would have totalled over $1000 a month - more than she gets on ss. We had NO idea any of this was going on, as I would have tried to help or advised her not to do that. Well $72,000 later, she asked for help. The atty we went to said she couldn't file bankruptcy because they would maker her sell her house. However, the house has in hers,mine & hubby's name since 1997- so then he said they couldn't get a judgement against the house since it would only be for 1/3. Doesn;t make sense to me now. He suggested to me that we put it in a trust - I don't know if I am comfortable with that as I don't know a whole lot about them. He told her to just stop paying the bills, and it would be a long time before anyone would file a judgement, and if they did he would let them know there is nothing to get as she is on a fixed income - well she did stop paying and I know I don't have to tell you all about the phone calls she gets everyday. She does not answer them, and gets letters constantly. Of course now I would know to send a letter for no phone calls, but at this point, I would have no clue as to who has purchased what debt, and what to do for her. She is a great lady, but there is NO WAY I can pay any of this for her, I am trying to dig myself out & pay for 2 kiddos in college. I am not really sure what to ask you guys for, except if anyone has any suggestions or ideas. I feel so bad for her & I know her pride kept her from telling us, but of course hindsite is 20/20.


Have you talked to an attorney recently, or only in 2005? He is right, that if they were to get a judgement there would be little they could get on a fixed income and only 1/3 stake in a house. Much depends on which state you live in. Some are more debtor friendly than others.
Law Student
San Francisco, California


Submitted by on Tue, 04/03/2007 - 18:26

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BTW you mentioned "fixed income". They can't garnish SS, and bankrupcy, most retirement accounts are exempt, sometimes they can be garnished though. You can lose your "personal exemption" from a retirement account sometimes if it is shown you'd been drawing large sums out to pay bills, etc. I read a Bankruptcy court summary about a week ago in which this happened.


Submitted by on Tue, 04/03/2007 - 18:39

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Depending on your state, they may not even be able to get at the homestead. I suggest you consult with another bankruptcy attorney or someone at a legal aid office for a second opinion. The first lawyer may be right, but he/she may be trying to sell the service of creating a trust. It never hurts to get a second opinion.

FYI: In Texas, the homestead is exempt from creditors except the mortgage lender.


Submitted by texaslawyer on Tue, 04/03/2007 - 20:27

texaslawyer

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Thanks lawstudent & TexasLawyer - we are in Illinois - I haven't really had much contact with this atty since this all started. I faxed over a letter that she had gotten from one CA, but when I call the office, either he isn;t getting messages, or he never calls back. This is surprising to us, because we have used this guy for several things and to buy our home, and he was always great - known him for years. But my confidence is slipping. It just seems contradictory to me that in one instance they can't take 1/3 of a house, but yet she couldn't file because they would make her sell. But that is still the same 1/3 so I don't get it. Her fixed income is from ss that's all she gets. And my deadbeat bro-in-law that lives there really doesn't help her out & she should have tossed him years ago - but that is a WHOLE other story. Don't mean to sound stupid, but where would I go for a legal aid office? We try & help her out with a little extra $ for food, and we pay her property taxes but I can't really pay huge atty fees. Would it be too late for her to still file bankruptcy? She has not paid on any of these since 11/05. If I had known alot of what I have learned from this board, I would have advised her differently and I would have questioned the atty more.


Submitted by dalfire497 on Wed, 04/04/2007 - 08:08

dalfire497

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I believe she gets around $830 per month - that is it. So you would think that these creditors would realize there is no way she could pay $72,000 worth of debt - she is 73 years old! Wouldn't they look at that before they would sue? And if she did try bankruptcy, would they actually make her go for counseling? Kinda seems redundant at this point.


Submitted by dalfire497 on Wed, 04/04/2007 - 08:12

dalfire497

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PLUS - I don;t know how much this would factor in either. As I said My hubby & myself are on the house with her. This is because 10 years ago we purchased a business, and needed a loan. It was mostly a good faith business and could not get a business loan so we applied a 2nd mortgage to get the funds needed, that is why our names were put on there. Now, I make the payments on that each month thru my company, and it is current...so I am thinking there isn't as much equity? Plus, it does show up on my credit report - but not hubby's. I think that because I am listed as second on it. So would a bankruptcy affect me? Such a mess!!


Submitted by dalfire497 on Wed, 04/04/2007 - 08:28

dalfire497

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