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  1. #1
    Join Date
    Mar 2009
    Posts
    15

    Default Sale of Assets, Credit Cards, Loans and Bankruptcy

    Hello,

    I want to sell my old 1993 car, since we only need one car now. I will use the money to pay off most of my credit card that was used for the car.

    I know that the sale of the care would fall in the lookback period if I declare bankruptcy before my home forecloses. However, it my records also show that it was applied to the c.c., then I figure the trustee wouldn't object to that.

    I only have 4 loans: My primary mortgage, my heloc second, my credit card I just mentioned for the car, and a primary mortgage on a second home in another state (upside down, but we want to keep it).

    My question is: If I pay off the credit card and do not include the other home in the Bankruptcy (keep paying on it), would the Trustee count the two loans on the foreclosure home as one loan and say we are trying to just bankrupt one company (I know that is a no-no). One of the loans is a FreddyMac by Wells Fargo Home Mortgage and the second HELOC is Wachovia now owned by Wells Fargo. The FreddyMac makes them two separate loans, if you know what I mean.

    I think I may have a buyer for the car. He is suppose to bring his money July 1. That's why I need to know.

    If our short-sale fails, we'll have to look seriously at the bankruptcy. I've been resisting, because we are insolvent and both will be on social security in a few more months. Don't know if bankruptcy is necessary, but not sure.

    Thank you so very much for any help I can get.

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Sale of Assets, Credit Cards, Loans and Bankruptcy

    If you sell your car you lose your exemption for part of the car's value. You would then pay your credit cards, and your other creditors would likely regard that as an improper preference and seek a court order that the credit card companies put the money back into the estate. So... what am I missing that makes your plan make sense?

    Why wouldn't you go with a Chapter 13 and try to cram down the mortgage on your second home to market value? What do you mean "bankrupt one company" - what companies are involved? Or do you mean different banks holding different mortgages?

  3. #3
    Join Date
    Mar 2009
    Posts
    15

    Default Re: Sale of Assets, Credit Cards, Loans and Bankruptcy

    Thank you for your reply. I apologize for my message not being clear.

    In reply to your questions:
    I can't remember the phrase, but I saw on the Internet that a person can't bankruptcy only one loan, because it basically just refusing to pay one company. So I'm not sure if that means you must have more than one loan to declare bankruptcy, or if it means you can't bankrupt only one loan out of your three loans, for example. Since we only have one credit debt (for my car I want to sell), the loan for the second home we want to keep, and two loans on the home that will foreclose if the short sale doesn't go through, I'm wondering if we need to keep the credit amount open or not. If there is no such law, then maybe that is why my question doesn't make sense.

    In regards to Chapter 13, we qualify for Chapter 7 and just want it over with. We do not want to get locked in to paying for that HELOC for many years while existing on social security and paying for our second home we are moving into (bought 4 years ago). We've been trying to sell our primary home for nearly a year, so selling it is not possible without a short-sale (which are hard to get approved in many cases).

    So, my question back to you is, if the buyer does actually buy the car July 1, should I just set the money aside (instead of paying the credit card) so the Trustee can decide where it should be applied? If the guy shows up to buy the car, I can't very well tell him he can't buy the car ... I promised.

    Thank you.

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