Bankrupty and Liens

[blady]

My question involves bankruptcy in the state of: Indiana

Probably will have to see a local lawyer but here goes...

Spouse is 74, not good health. I am 65, also not good health. We purchased residence in 1992 before being married as tenants in common. Never changed it after we married.
Did debt consolidation in 2015, which was a joke, but ran out of money to pay all the credit cards off. This left approximately $18,000 on one, $8,000 on another and about $2,000 in my medical bills. All of these have a loan on residential property. credit cards were on husband's name only, medical on my name only. Debt consolidation also left us with a $18,000 tax bill to IRS we are paying on installment. We live on social security only. Husband went on at 62, I went on disability at 63, now social security. Liens were all placed when we were on social security as only income.

We want to sell the house or do a reverse mortgage because we have more medical bills coming in and the house needs work done that we cannot afford. We want to move out of it into something we can handle. But we still have about $30,000 mortgage on it. Plus the approximately $30,000 on the liens. So we would not get much out of the property once these things are paid off. Which I don't think will really do us much good except to get out of it.

I do have a 2nd residence in my name that my granddaughter is buying on land contract from me at about $6,000 a year. She is paying it on time. But still owes about $60,000 on it. She can not get a mortgage on it which is why we did land contract.

We want to know if we would be wiser to just file bankruptcy? Someone told us that if husband filed only, the liens on residence would not go away. Someone told us that if we both filed then granddaughter would lose my home she is buying unless she could refinance and pay that money but then that would have to be used to pay liens. Someone told us liens would never go away unless we settled with the people with the liens. But to pay off the liens would do us no good and we would not have any money unless we could refinance or reverse mortgage and no one will refinance with the debt we owe and what we have on liens on the house.

We expect to have another $10,000 to $20,000 in medical bills this year, also.

Any advice or suggestions. Thanks.

[pg1067]

Did debt consolidation in 2015, which was a joke, but ran out of money to pay all the credit cards off. This left approximately $18,000 on one, $8,000 on another and about $2,000 in my medical bills. All of these have a loan on residential property.

I assume you meant "lien," not "loan." If that's correct, then that must mean that your creditors sued you and obtained judgments. Correct?

We want to know if we would be wiser to just file bankruptcy?

"Wiser" implies a comparison, but it's not clear what alternatives you're considering. In any event, anonymous strangers on the internet are in no position to assess what your best option is in this regard. What I can tell you is that, if your creditors (credit card issuers and medical providers) have judgment liens against your property, then they have secured claims, as opposed to unsecured claims, which is what they had prior to the creation of the judgment liens. That means that bankruptcy might not be of as much benefit to you as it would have had you filed before the creation of the judgment liens.

Someone told us that if husband filed only, the liens on residence would not go away. Someone told us that if we both filed then granddaughter would lose my home she is buying unless she could refinance and pay that money but then that would have to be used to pay liens. Someone told us liens would never go away unless we settled with the people with the liens.

Are any of these "someones" attorneys who understand bankruptcy law and the law relating to real property liens? Is the second home that is the subject of the land contract also subject to any or all of the judgment liens?


I suggest you seek a consultation with a bankruptcy attorney as soon as possible.

[blady]

Yes. Although husband was on social security at the time and no other income. We objected but they won.
We had no idea they would do lien on home. We were trying to work out a settlement/payment plan with them.
No. they are not. No, the second home is not. Husband is not on the deed. Only myself.

I will. Was just trying to find out if I had any recourse before I saw one.

[llworking]

Yes. Although husband was on social security at the time and no other income. We objected but they won.
We had no idea they would do lien on home. We were trying to work out a settlement/payment plan with them.
No. they are not. No, the second home is not. Husband is not on the deed. Only myself.

I will. Was just trying to find out if I had any recourse before I saw one.

Definitely talk to a bankruptcy attorney but I am pretty sure that if you have a proper land contract on the house your granddaughter is buying then that home should be safe. However, she might need to make her future payments to the bankruptcy trustee.