WWYD - bankrupt IL

[Anonymous]

What is a better plan?

[Anonymous]

Anonymous wrote:What would you do if your IL is dependent on you financially to avoid foreclosure, has low six-figures in equity in their home, but will not sell?

Unmarried 79yo IL informed us in mid-2022 that they ran up 50k+ in credit card debt. Last year, we learned they were in pre-foreclosure and spouse (only child) agreed to cover mortgage. IL also filed for Ch 13 last year, which is now active.

IL’s only income is SS, about the same amount as their mortgage. They have about 300k in equity and plan to either get a job or rent a room for additional income.

There is 70k left on house. IL is in FL; we are in DMV.

Thank you!!

If your spouse is determined to support their parent, then helping the parent keep the house is probably the most sensible option. It seems likely the parent will need to go on Medicaid eventually to pay for nursing home care? If so, you will want to see about what to do with the house - if you are pouring money into it, you would want it to be your asset, not the in-laws asset, so Medicaid won't come after it later to pay back the cost of the in-law's care. So if possible you might want to see if you could buy the house from the in-law and just pay the mortgage.

The question is, what is your in-law's plan for if he/she starts needing daily living assistance? How to pay for an inhome aide? How to pay for assisted living if needed?

With SS as the only income, does your inlaw qualify for any food, utilities assistance? Does owning the house as an asset disqualify them?

[Anonymous]

Anonymous wrote:I think Florida is a really good state to declare bankruptcy and keep your house. I remember that’s why OJ moved to Florida because creditors couldn’t touch his house. You need to consult with an elder care lawyer based in Florida!

I is not just Florida LOL omg how are people so dumb.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think Florida is a really good state to declare bankruptcy and keep your house. I remember that’s why OJ moved to Florida because creditors couldn’t touch his house. You need to consult with an elder care lawyer based in Florida!

I is not just Florida LOL omg how are people so dumb.

IDK, how are they?

Bankruptcy laws are federal *but exemptions are governed by state law*

Florida has one of the most generous homestead exemptions:

Under Florida bankruptcy laws you are allowed to exempt an unlimited amount of value in your home or any other property which is covered by the homestead exemption.

Restrictions: the property may not be bigger than half an acre in a municipality, or 160 acres elsewhere. If owned less than 1,215 days before you file for your Florida bankruptcy, Federal exemption applies. Meanwhile if you’re in PA or NJ, tough luck! No exemption for you

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think Florida is a really good state to declare bankruptcy and keep your house. I remember that’s why OJ moved to Florida because creditors couldn’t touch his house. You need to consult with an elder care lawyer based in Florida!

I is not just Florida LOL omg how are people so dumb.

IDK, how are they?

Bankruptcy laws are federal *but exemptions are governed by state law*

Florida has one of the most generous homestead exemptions:

Under Florida bankruptcy laws you are allowed to exempt an unlimited amount of value in your home or any other property which is covered by the homestead exemption.

Restrictions: the property may not be bigger than half an acre in a municipality, or 160 acres elsewhere. If owned less than 1,215 days before you file for your Florida bankruptcy, Federal exemption applies. Meanwhile if you’re in PA or NJ, tough luck! No exemption for you

Ha! I love it that the person who posted “LOL omg how are people so dumb” is really the dumb one and doesn’t realize it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think Florida is a really good state to declare bankruptcy and keep your house. I remember that’s why OJ moved to Florida because creditors couldn’t touch his house. You need to consult with an elder care lawyer based in Florida!

I is not just Florida LOL omg how are people so dumb.

IDK, how are they?

Bankruptcy laws are federal *but exemptions are governed by state law*

Florida has one of the most generous homestead exemptions:

Under Florida bankruptcy laws you are allowed to exempt an unlimited amount of value in your home or any other property which is covered by the homestead exemption.

Restrictions: the property may not be bigger than half an acre in a municipality, or 160 acres elsewhere. If owned less than 1,215 days before you file for your Florida bankruptcy, Federal exemption applies. Meanwhile if you’re in PA or NJ, tough luck! No exemption for you

Ha! I love it that the person who posted “LOL omg how are people so dumb” is really the dumb one and doesn’t realize it.

Dunning-Kruger effect, it's pretty common. See Trump for examples.

[Anonymous]

Op here. Thank you, all.

We don’t want her to lose her home so we will continue to pay (from dwindling savings) until we can figure out a plan.

Would a reverse mortgage be an option?

Is it possible to recoup the money we contributed if the house doesn’t pass to DH?

We’re meeting with an FL elder law attorney next week to hopefully get help.

[Anonymous]

Anonymous wrote:Op here. Thank you, all.

We don’t want her to lose her home so we will continue to pay (from dwindling savings) until we can figure out a plan.

Would a reverse mortgage be an option?

Is it possible to recoup the money we contributed if the house doesn’t pass to DH?

We’re meeting with an FL elder law attorney next week to hopefully get help.

social security can't be garnished for credit card debt. the credit card people can pound sand. stop paying the credit cards. she can continue to pay mortgage from social security.

you will not be able to recoup the money as is. Ideally she would sell you a % of the house based on whatever you have already contributed. As a joint tenant with right of survivorship, then the house would pass to your DH automatically. However, the bank would likely have to sign off on this. A reverse mortgage means the bank will get the house on her death, and again, your contributions will be not be made whole.