Posted on: 20th Mar, 2010 03:05 pm
Hi,
My inlaws are considering Chapt. 7 bankruptcy..No household income other than pending disability SSI(legally blind)..Their home is under contract for sale...they expect to net 35K, they have no other assets and mountains of debt including problematically--a 40k Sallie Mae, and 20k insider debt (family member--not us). Thoughts on:
1) Treatment of the 35k net on sale any exemption from recent sales?
2) student loan discharge due to hardship;
3) treatment of the insider debt (if not reaffirmed afterwards
4)We have spent 35k fininshing our basement as an inlaw apt. for their use---any mechanism for recouping part of that so it is not considered an insider payment.
Thanks in advance for any advice...
My inlaws are considering Chapt. 7 bankruptcy..No household income other than pending disability SSI(legally blind)..Their home is under contract for sale...they expect to net 35K, they have no other assets and mountains of debt including problematically--a 40k Sallie Mae, and 20k insider debt (family member--not us). Thoughts on:
1) Treatment of the 35k net on sale any exemption from recent sales?
2) student loan discharge due to hardship;
3) treatment of the insider debt (if not reaffirmed afterwards
4)We have spent 35k fininshing our basement as an inlaw apt. for their use---any mechanism for recouping part of that so it is not considered an insider payment.
Thanks in advance for any advice...
Hi ssleedmd,
The amount received after the sale of the property may be used by the attorney in order to pay off the dues of the other creditors. As far as student loans are concerned, they generally do not get discharged in a bankruptcy filing. However, if your in-laws can prove sufficient hardship, the court may consider their case. As far as the insider debt is concerned, it will be satisfied by selling the property of your in-laws.
The amount received after the sale of the property may be used by the attorney in order to pay off the dues of the other creditors. As far as student loans are concerned, they generally do not get discharged in a bankruptcy filing. However, if your in-laws can prove sufficient hardship, the court may consider their case. As far as the insider debt is concerned, it will be satisfied by selling the property of your in-laws.
Thanks for the response. I assume this means that insider debt does not have any special standing. Are liquidated assets divided up to creditors according to % of total debt? If the in-laws have no remaining assets is there harm in not filing for bankruptcy (other than dealing with collection calls)--they have no intention of assuming future credit obligations.