Daughter filing bankruptcy

[Westernskies]

I've decided to pay for my daughter's bankruptcy legal fees ($2K), and hopefully, that will end this fiasco.

Maybe you could make her a negative amortizing loan...nothing down, easy payments, no qualifying.

Sounds like you are being forced to make tough choices. Good luck, and keep us posted how it's going. Wish you and DD the best. SIL, not so much...

 

[DMGO]

UPDATE: Ok, we met with the bankruptcy attorney, and my daughter filed chapter 7 bankruptcy, which he described as a "total" bankruptcy. He recommended that my daughter and sob husband include their home mortgage in the bankruptcy, as there is no other way out of that for them, and they did that. Now, it's unknown how soon they will have to vacate their home, being that they are actually current on the mortgage payments. Also, I assume that they shouldn't bother with state property taxes, which come due in November. This whole thing is bewildering to me, but I did pay all the legal fees. I wonder what happens next?

 

[Martha]

There will be a "First Meeting of Creditors", usually about a month after the bankruptcy filing. The meeting is with the bankruptcy trustee (most of the time no creditors show up) and in most places goes very quickly. The trustee wants to find out if there are any assets to pursue or if there is anything fishy with the bankruptcy. The trustee will ask them questions under oath. In my area 5 meetings were scheduled per half hour, so you can see how fast they can go. I don't know if more time is allowed since bankruptcy "reform."

Assuming there are no issues, such as whether they belong in chapter 13 (where you pay part of the debts pursuant to a plan) rather than a chapter 7, then they will await their discharge. If any creditors believe they were defrauded they need to bring a lawsuit as part of the bankruptcy before the discharge date. The discharge date will be on the notice of meeting of creditors, which will be mailed to them directly. Most of the time nothing happens. Before the discharge date they may be approached by creditors as to whether they want to reaffirm a debt, such as the house debt. It sounds like the plan is not to reaffirm, which likely is wise in their situation.

After the discharge the bankruptcy is over. The lenders with collateral can repossess or foreclose at that time. If they want to start before the bankruptcy is over, they have to make a motion for permission from the bankruptcy court.

If they are not going to reaffirm on the home they should not pay the property taxes or any more mortgage payments.

See my signature.

 

[KB]

You're a good dad to her your daughter, DMGO.

I hope when all is said and done that they take a good hard look at how they should be managing their finances. It's be a shame to have them repeat their mistakes.

All the best to them.