Saw the bankruptcy lawyer today

**NikoSan999** · 12-09-2009, 09:10 PM

Well we met with the bankruptcy lawyer today and much to our surprise, while willing to file, he said his advice was NOT to file. At least at this time and that maybe it wouldn't be necessary.

This is the same one we saw back in January. He was a Trustee for many years. Want to say 20, but a long time. Plenty of experience.

His advice was since we are willing to bankrupct on our house ( which is necessary ) to just let it go into foreclosure like the other one. He said unless someone sues us ( which the other foreclosure has already done ) and we pointed out that that had already happened ,that we wouldn't need to file. Then he said unless someone files a judgement it still wouldn't be necessary but at the point the judgement WAS/IF filed it, the bankruptcy could still be done at that time on an hours notice.

He did not push for bankruptcy. In fact his advice was wait to see if it was needed. Surprise Greebo!!! There are still decent people/lawyers out there if needed.

We can't make the house payment when unemployment runs out and I'm getting ready for the next (3rd tier). There will be about 6-8 weeks in between according to the lady at the unemployment office. This one (2nd one ) should be close to being done. So we will see.

Without the house payment we should be able to make the rest of the bills including the credit cards. Deciding factor is what Wachovia/Wells Fargo does with their business loan in another 4 months, about April. We figure it will go from about $550 to $3000. If business picks up even a little, maybe, just maybe we can pull this out of the water. There are a couple of credit cards that are about $3000 or less and 2 equiptment items that are just several months off.

Other factor will be if after foreclosures they will just drop it and not do judgement or 1099's. He did say that even if they issued 1099's we could still file and be clear. I asked that one again and he read it right out of his law stuff and the IRS website. So I do feel better.

If we can't do this any longer at least we have a chance at not HAVING to file. Maybe. Then we could pay everything else. Maybe. If the mortgage companies and the PMI company don't push it we may be ok. Maybe. Not looking for it tho. He did say the PMI and/or the mortgage company of the house in his name could come after the business as well but could only get what the business was worth and that could be done thru the bankruptcy with a Chapter 13 payback. The house we live in can't do jack squat about the business and this house is Bank of Hell. It's in my name only.

For Scott if you read this. Yes, houses CAN be taken down totally in bankruptcy with no financial obligation left. And yes, I nailed him down. Actually did not have to "nail" him down. He read it out of his law and the IRS website. I asked a couple times and he said NO financial obligation. On either house. Multiple.

And no Florida is not a no recourse state. The bank cannot MAKE you keep the house, deal or otherwise. The court will not MAKE you keep a house, primary or otherwise and you do not have to keep it if the bank offers a "deal or break" on interest, time etc.

One word of advice he gave and I'll pass on to someone else...he said NO ONE should ever have a bank account of any kind with a bank he/she owes money to. Keep them separate. Also a separate bank account cannot be froze without a judgement and you will know that one has been issued by letter.

Will admit, so far, after we left the office, I haven't had any more chest pains. Cardiologist was not a happy camper with me yesterday. While I'm not happy about losing the house, I'm not happy about a heart attack either. Death isn't retroactive.

**ladytoysdream** · 12-09-2009, 09:18 PM

((hugs))
Wow, a lot of information in your post.
I am glad you are feeling somewhat better about the whole thing.
Chest pains are not a good thing.

Are you sure about the UE money ..that you have a lapse in several weeks ?

Were you able to get any of this information that you just wrote in this post, in writing from the lawyer ?

**kaurand554** · 12-09-2009, 09:21 PM

"Other factor will be if after foreclosures they will just drop it and not do judgement or 1099's. He did say that even if they issued 1099's we could still file and be clear. I asked that one again and he read it right out of his law stuff and the IRS website. So I do feel better."

I am no expert in this matter, but I was listening to the today show today, as I was puttering around... and I am just about 99% positive, that the financial expert said today to someone who called that although "written off debt" is taxed as income (1099) it is not the case with mortgages right now. I looked quickly and can not find the link! (I'm sorry) but hoping that other computer gurus can find it (If that is what you are worried about, I believe they said up to 200,000)

I hope this tid bit helps..........

**NikoSan999** · 12-09-2009, 09:41 PM

Well I'm not feeling better about it but I guess you could say I have come to some kind of what will be at this point will be. That's not right either but I don't know how to explain it. And yeah, sometimes when I write I get carried away like I'm holding an entire conversation just no one on the other end. Can they lock you up in a padded room for this?? Hey that would solve the housing problem.

I went and signed up last Monday and you know what that is like..sit and wait. An old man, old telling you, was there telling the girl he hadn't received. She checked and said he was in between 2nd tier and 3rd tier and that it was taking between 6 to 8 weeks for the review to see if still qualified. I know it took 3 weeks for me between 1st and 2nd. The checks started then stopped. When I went in and asked what the deal was she checked and said they had stopped because they were "reviewing". That 3 weeks bout done us in then. Somebody on a thread, don't think it was you, recently posted that they were told the same thing. 6 to 8 weeks. I can only guess they are backed up. We can't go 6 weeks much less 8.

No, did not get it in writing. I really don't feel I needed to. He went to the IRS website and read it off. I had read it before. Going to try to copy and paste here off the IRS website.
2. Is Cancellation of Debt income always taxable?

Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:

Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.

But he didn't push for us to file. Just said if we needed to or it came to it he could get a case number in less than an hour and take it from there.

I've been having some bad chest pains for about a month. My appointment yesterday she was wanting me to do a stress test AGAIN this year and I said no at least not right now. MAYBE after the first of the year when at least it would apply to a new deductible year. Remember I have a $5000.00 deductible. I told her if I felt worse I would do it. She told me if they lasted a half hour to haul my ass to the emergency room. I think it's stress. Which still isn't good but I need to keep the stress level down.

**NikoSan999** · 12-09-2009, 09:45 PM

Originally Posted by kaurand554

"Other factor will be if after foreclosures they will just drop it and not do judgement or 1099's. He did say that even if they issued 1099's we could still file and be clear. I asked that one again and he read it right out of his law stuff and the IRS website. So I do feel better."

I am no expert in this matter, but I was listening to the today show today, as I was puttering around... and I am just about 99% positive, that the financial expert said today to someone who called that although "written off debt" is taxed as income (1099) it is not the case with mortgages right now. I looked quickly and can not find the link! (I'm sorry) but hoping that other computer gurus can find it (If that is what you are worried about, I believe they said up to 200,000)

I hope this tid bit helps..........

Thank you and yes, I hope someone can post a link. I will look myself but if anyone else can find it I would appreciate it.

Man, that would be wonderful. Just let us pay the rest of our debt and leave us alone.

**Daisygirl** · 12-09-2009, 09:48 PM

Oh my gosh, Niko PLEASE take care of yourself - you worry me!

What happens happens. You take it one day at a time and just try really hard to let go of some of that stress!

**McD** · 12-09-2009, 10:08 PM

Originally Posted by NikoSan999

One word of advice he gave and I'll pass on to someone else...he said NO ONE should ever have a bank account of any kind with a bank he/she owes money to. Keep them separate. Also a separate bank account cannot be froze without a judgement and you will know that one has been issued by letter.

This is very good advice to everyone. Banks can and will use the 'right to offset' to collect a debt. At the first bank I worked at, I managed the overdrawn checking accounts/past due loans and the final step in my process after my friendly calls, then my stern calls, was to utilize the right to offset before sending them to a collections.

That basically meant that if someone overdrew their account/deaulted on a loan, was making no effort to pay and wasn't responding to my calls, the bank could & would use funds in any other account that they were the primary owner on to collect the monies owed us.

**Contrary Housewife** · 12-09-2009, 10:29 PM

It is starting to sound like you have a chance of pulling through this. I wish you all the luck in the world.

**NikoSan999** · 12-09-2009, 10:33 PM

Originally Posted by Contrary Housewife

It is starting to sound like you have a chance of pulling through this. I wish you all the luck in the world.

Thank you with all my heart!!! It's a small, small chance but a chance never the less.

And can you believe, a bankruptcy lawyer telling you NOT to file, at least not yet until you have to??? HE'S a keeper.

Key will be when Wachovia/Wells Fargo does their thing come I believe April. Everyone keep their fingers crossed for us.

**Palooka** · 12-09-2009, 10:33 PM

Niko, I'm glad you went and feel a little better. He does sound like a good lawyer. Please take care of you first, no matter what.

**Palooka** · 12-09-2009, 10:38 PM

Originally Posted by MrsMcDowell

This is very good advice to everyone. Banks can and will use the 'right to offset' to collect a debt. At the first bank I worked at, I managed the overdrawn checking accounts/past due loans and the final step in my process after my friendly calls, then my stern calls, was to utilize the right to offset before sending them to a collections.

That basically meant that if someone overdrew their account/deaulted on a loan, was making no effort to pay and wasn't responding to my calls, the bank could & would use funds in any other account that they were the primary owner on to collect the monies owed us.

Okay I hope I am understanding this. Say one owes a credit card debt to the same place they bank at and shows no intrest in paying it...that bank can just take the funds right out of your account until they get all their money back? Scary stuff.

**frugalfranny** · 12-09-2009, 11:16 PM

Hope things work out for you Niko.

But.......take care of your HEALTH first!!

**Thevail** · 12-10-2009, 02:17 AM

Take a deep breath Niko... it's always darkest just before the dawn! You can do it!

**Greebo** · 12-10-2009, 05:30 AM

Originally Posted by Thevail

Take a deep breath Niko... it's always darkest just before the dawn! You can do it!

No it's always darkest at the midpoint between dusk and dawn.

It's actually quite bright just before dawn...

Oh...wait...this was meant motivationally wasn't it?

**McD** · 12-10-2009, 06:50 AM

Originally Posted by Palooka

Okay I hope I am understanding this. Say one owes a credit card debt to the same place they bank at and shows no intrest in paying it...that bank can just take the funds right out of your account until they get all their money back? Scary stuff.

Yep...one of those little details mentioned inthe fine print that people agree too and rarely ever read. We had a guy default on his car loan and before sending it to collections, we took a c.d. that he had at the bank and applied the balance to the principal he owed us.