Hello, I know someone filing for bankruptcy. The lawyer told them they can
keep the house and vehicle and it will get rid of all their credit card
debt. It cost $1,200 to start the process.

They were told the house could not be taken because the loan was for more
than the value of the house at the time (1-2 years ago) so it cannot be
considered collateral.The house was appraised by 2 of their appraisers the
last time they got the loan. They loan was renewed for more money every few
years and the house was assessed each time.

The lawyer told them the vehicle loan was 3 times over it's actual value so
that cannot be taken either because when the load was taken out it was for
more than the cost of the vehicle\collateral.

I'm curious as to how it all works. Why would the loan company (same for
their car and house) have those 2 articles in the contract as collateral
when the lawyer says they cannot be because of their values compared to the
loan amounts?

What about the items they purchased on their credit cards? Do they get to
keep them after the bankruptcy? If so, what prevents people from buying a
bunch of things and then filing bankruptcy to keep it all for free?

Will the bankruptcy automatically close all of their credit cards? The cards
with zero balances or just the cards claimed as debt?

One person is retired and gets SS or something --- whatever people get when
they retire each month.

Thanks
John

The game is to get an individual in debt and keep them in debt sucking
money out of them while they are "drugged" with the hypnotic suggestion that
life is good!!
But like all things you get old, injured, or loss the income and the
truth you didn't care about comes'a visit'en!! YES, in BK everything you
own, have, control, or have a right to is an "asset" the creditors want..!!!
Sure..., the creditors "may" let you keep the junker, but most likely
they'll grab it, sell it, or junk it and you pay the difference!! The house
is a different story. Unless it is in ******-town, the barrio, or the bayou
it is always worth something.
Oh, the creditors won't take it, but if you are in such bad shape you are
filing for BK you might not be able to maintain the mortgage payments
anyway. Main thing to do is save the money on attorney's fees. Stop paying
on everything EXCEPT the house payment. Hit the public library for books by
Nolo Press.., and educate yourself...!!!
Don't ever forget the old saying (and creditors know it well), "..when
creditors owe you money, you are in trouble! When you own creditors money,
they are in trouble..!! There's really "nothing" a creditor can DO TO you
"legally" without a court "Order!" Well, OK.., they can nab the junker, but
as any repo man well tell you.., its' a dangerous job..!!

The person that is posting answers in such a rude manner. I don't know
what happened to you, but get help, you need it.

> They were told the house could not be taken because the loan
was for more than the value of the house at the time (1-2 years ago) so it
cannot be considered collateral.The house was appraised by 2 of their
appraisers the last time they got the loan. They loan was renewed for more
money every few years and the house was assessed each time.

This is correct. Think about it--if the house were sold to
satisfy their other debts, there wouldn't be anything left over
once the mortgage was paid to give anyone else.
The lawyer told them the vehicle loan was 3 times over it's
actual value so that cannot be taken either because when the load was taken out
it was for more than the cost of the vehicle\collateral.

Correct. See above.
I'm curious as to how it all works. Why would the loan company
(same for their car and house) have those 2 articles in the contract as
collateral when the lawyer says they cannot be because of their values
compared to the loan amounts?

The house and car are still collateral for the loans; if the
payments are not kept current, the lenders can
foreclose/repossess. Don't forget--although bankruptcy discharges
one's personal obligation for debt, unless you file specific
motions with the court (which probably wouldn't be available in
this case), it doesn't discharge the lien on secured property.
What about the items they purchased on their credit cards? Do
they get to keep them after the bankruptcy?

Yes, because this debt is unsecured.
If so, what prevents people from buying a bunch of things and then filing bankruptcy to keep it all for
free?

Because this is called bankruptcy fraud, and is a federal felony.
Will the bankruptcy automatically close all of their credit
cards? The cards with zero balances or just the cards claimed as debt?

Only the cards on which they owe. OTOH, even if the card has a
zero balance, it can still be closed by the lender because of the
bankruptcy.

--
Brett

************************************************** ***************
* Personal Injury/Malpractice Bankruptcy *
* *
* BRETT WEISS, P.C. *
* Attorneys at Law *
* Maryland, D.C. and Federal Bars *
* lawyer@erols.com *
* http://www.erols.com/lawyer *
* *
* Small Business Estates & Estate Planning *
************************************************** ***************

The Small Print: This response is for discussion purposes only.
It isn't meant to be legal advice and you shouldn't treat it as
such. If you want legal advice, speak with a local lawyer
familiar with your state's laws who can review *all* of the facts
and the law applicable to your situation.
************************************************** ***************

Is the first part of your e-mail address "dork"? Don't read'em, if you
don't like'em! What the hell are you lurking around the BK site for anyway?
Can YOU help? Now.., go to your room..!!

"MWH" <res0n8e5@verizon.net> wrote in message
news:0heZa.3253$dm.1597@nwrddc02.gnilink.net... Is the first part of your e-mail address "dork"? Don't read'em, if you don't like'em! What the hell are you lurking around the BK site for
anyway? Can YOU help? Now.., go to your room..!!



Dear Grandpa,

Please take all of the medicines your doctor prescribed. It's the little
green pill that will make the anger go away.

Love,
Susie


*****

Rob Stumpf, Esq.

Stumpf and Ginter, Attorneys at Law
Practicing Bankruptcy in NY and NJ

visit us at www.online-law-firm.com
or email rob@online-law-firm.com


Disclaimer: No email or newsgroup communication is to be construed to
establish any sort of an attorney-client relationship, is not legal advice,
and is not a replacement for the advice of a competent attorney in your
jurisdiction.