Posted by River City on April 04, 2005 at 06:47:59:
Thanks for that explanation, John Boy. I am beginning to learn about bankruptcies (I am taking a correspondence course) and that even helped me.
banckruptcy question - Posted by James Harris
Posted by James Harris on April 02, 2005 at 14:02:10:
If someone puts properties in a trust, an asset protection plan. The leins, mortgages, loans would be still in the borrowers name. If that person(s) files bancruptcy, what will happen to the assets? What happens to the loans? Please advise. I had heard that this is a way to get free and clear of most if not all debt and keep your assets.
Re: banckruptcy question - Posted by melissa withrow
Posted by melissa withrow on May 28, 2005 at 18:47:25:
I am head over heels in debt up to my rear. I want to file backruptcy but don’t want to lose what I have worked so hard for. HELP!
Re: banckruptcy question - Posted by gary forcella
Posted by gary forcella on May 24, 2005 at 10:42:55:
I filed a BK7 in April 2001. When could I do another BK7? I live in Texas.
Re: banckruptcy question - Posted by JohnBoy
Posted by JohnBoy on April 02, 2005 at 21:45:05:
You heard wrong!
What happens to the loans? Depends. Depends on whether or not the debtor reaffirms the loans, meaning they continue to pay on them, or whether the debtor wants to discharge the loans and wipe them out. If the debtor discharges the loans then they lose the assets. The loans, mortgages, and any other liens are secured against the assets. Secured creditors get to take the assets if you discharge the debt.
Only unsecured creditors can be wiped out in BK. You are only allowed to keep x amount when filing BK. Assets in a trust where the debtor is a beneficiary will not protect the assets from being taken. The court will attach the interest owned by the beneficiary filing BK.
Even if the debtor was not a beneficiary of the trust where the debtor deeded all their interest to the trust would not protect the asset from the secured creditors that have liens against the property. The liens would still have to be paid since they are secured creditors.
There is no way you can wipe out debts owed on assets where the creditor has a secured lien against the property and keep the property without paying off the liens. It doesn’t matter how you set it up or what you put the property in.