Bankruptcy questions

[moneyhelp2024]

Hi all. I am wondering if you can give me some advice. 

My brother came to me today and notified me he has an active addiction and has raked up about 100k in credit card debt. He is paying minimums and paying his bills but really doesn't make enough to tackle it aggressively.

He is getting help for the addiction. He recognizes that however he solves the debt problem, he will need behavior modification so he doesn't get in the same situation in the future. He has a good support system and I truly believe he is in a good spot and mind space to make these changes. 

I recommended look into bankruptcy but the concern is that he owns a triplex with friends, each owning 1/3 of the building and residing in their respective units. He is concerned that it would be impossible due to the friends owning the other 2/3 of the building. 

Does anyone have any information regarding this? Any resources I can send his way? 

[clairebear]

He needs to talk to a bankruptcy lawyer. Does he personally live in the triplex? Are all 3 of them on the mortgage together? Is he current on the mortgage payments? That's a unique situation that a lawyer would be the best equipped to handle. Some do a free consultation. I would definitely try to get a consultation and go from there. 

[moneyhelp2024]

Aug 27, 2024 21:06:27 GMT -5 clairebear said:

He needs to talk to a bankruptcy lawyer. Does he personally live in the triplex? Are all 3 of them on the mortgage together? Is he current on the mortgage payments? That's a unique situation that a lawyer would be the best equipped to handle. Some do a free consultation. I would definitely try to get a consultation and go from there. 

Thank you for the response. I did encourage him to reach out to a bankruptcy laywer and after discussing it, he plans to. I know it's not as simple as just filing and wheeeee done. 

Yes, he lives there
Yes, all three are on the mortgage
Yes, he's current on the payments

[ellipses84]

It depends on the agreement the shared owners have for the property, the laws in state they live in and the type of bankruptcy, so it’s best to talk to a local bankruptcy attorney. Often a shared property with a spouse is sold in a bankruptcy to pay debts, but the triplex may be “tenancy in common”, where owners hold individual portions of the property. Would he be ok selling his portion if that is possible? I think the better move would be to offer to sell it to the other owners, or sell it to someone else for a profit, to pay down his debts, unless it’s not worth much.

Another option that is a step down from bankruptcy is a to use a legit debt resolution company (not a debt consolidation loan company). They can negotiate with creditors to reduce interest and settle debts, and help manage 1 monthly payment the person in debt can afford. One major rule is you cannot use any credit cards while using the service. It could take several years but at least he’d be paying off the debt, rather than juggling payments with increasing interest. It can impact his credit at first, but not as bad or as long as a bankruptcy would, and carrying high balances / risking missing payments could make it worse anyway.

Legit comanies should be associated with the American Association for Debt Resolution (formerly the American Fair Credit Council).

aa4dr.org

[livinitup]

How much work are you willing to do? Better question, how much of your work (time/effort) would be helpful to dedicate to your brother during his addition battle and/or recovery? And how much of that helpful work are you willing to do?

If you are best as a “phone call away” to talk about finances. Great, carry on. He has your number.

Are you getting into his financial picture to give him the best landing with this unmanageable cc debt? A bankruptcy lawyer is a good start.

If you want to get into it - Is the triplex his biggest asset? Does he plan to continue to live there or is he leaving it? Have taxes been paid/up to date? Mortgage payments? Any liens in the property? What is the payoff date for the mortgage? Is there any equity in the property? Are the other mortgage holders/owners financially stable or not? Is the ownership part of an LLC or business of any kind? Anything signed on the joint ownership? Any agreements or rights in writing? Is there proof for any of these answers?

I’m not asking to be curious, these are some of the questions the bankruptcy lawyer is going to ask and charge to find out. Having clear picture is your brother’s best start.

Are you worried about the addiction and behaviors that led to it? This is a lot more to hear than he has debt. I’m sorry for you.