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Old 10-07-2019, 12:49 PM   #1
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Question Bankruptcy?

Hello Everyone--

This post is full of ignorance... because I fully admit I have no idea what I'm talking about, so please forgive me for asking what are probably really stupid questions. And let me also say up front that I'm in no way trying to make light of the subject and the last thing I want to do is offend anyone, so I apologize in advance if anyone takes offense.

All of that said, I was reading a newsletter from a finance/retirement columnist and my mental wheels started turning and it occurred to me that if anyone might know the answers to some questions I thought of, the folks on these forums might.

I've always heard that if someone files for bankruptcy that they're forced to liquidate all of their assets but that they can't be forced to sell their home. If that were to happen, wouldn't the RV be classified as an asset that one would have to divest in order to pay the debts? Or would it be classified as the home and the filer would still be able to keep it? What happens if the RV is the primary/only residence and yet the RV loan is one of the debts causing the owner to file? Does the state in which the owner is domiciled make any difference? If so, anyone know which domicile state(s) would have the most advantageous laws in favor of the RV owner?

No one ever plans to file for bankruptcy (and I certainly don't), but the columnist was specifically talking about rising health care costs and how it's not unheard of for folks to be forced to file due to unforeseen medical expenses. The thought of that just scares the bejeezus out of me--especially since I'm unmarried and not nearly as (financially) prepared as I would like to be for retiring in just 16 years (mentally, I'm ready to retire yesterday ). I'm also not-yet full-timing--heck, I don't even own my RV yet--but the dream is to do so shortly before, and definitely after retirement--selling the S&B and hitting the road full time. In other words, I'm not currently even at risk, but like I said, the mental wheels started turning.

I'm not asking for any personal stories as it's obviously a very private matter, but maybe there are some lawyers or legal advisers on the forums who have some thoughts? Maybe someone knows someone who went through a similar situation who would have some knowledge on the subject? Heck, there's a very good chance that my bankruptcy assumptions above are just plain wrong too and I'm sure there are tons of folks reading here who could probably at minimum clarify those for me. It's definitely a downer of a topic, but when you don't know the answers, sometimes ya just gotta ask the questions.

Thoughts, anyone?

Michelle
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Old 10-07-2019, 01:05 PM   #2
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People file for many reasons .. really not anyone business as to why, the court will figure out why and see if itís justified.. now.. you are able to keep 1 house and 2 cars as of 10 years ago. If you are giving up a house and have a trailer/coach .. it can be used as your residence. We had a house and a 5r ... we had the option of keeping the 5r in place of the house.. I chose to start over with a clean slate..

Not sure as to the question of each state as I think itís a federal thing.. but also keep in mind . Itís on your record for 10 years and it takes a lot of explaining when trying for credit .. after about 2 years you are able to start with credit again .. sorry , a little more then the original questions but I am sure this will helps little.
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Old 10-07-2019, 01:40 PM   #3
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i just went through this, and it usually works like this. if you own the rv outright, and live in it it qualifies as your primary residence and is exempt under the homestead exclusions for your state. in my state of South Carolina that amount is 69K. for a single filer. the federal limit is 25K. so for a chapter 7 filing the rv cant be worth more than the exemption. if you file chapter 13, you keep the rv no matter what its worth, but that way requires a repayment plan to the court. if you owe money on the rv to a bank, its gone to the repo man.
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Old 10-07-2019, 04:25 PM   #4
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Also if doing a Chapter 13 repayment bankruptcy, you can keep vehicles out of it and keep paying them separately
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Old 10-07-2019, 04:45 PM   #5
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There are a lot of variables and negotiating options involved. Maybe you can keep it, maybe not. Not being true real estate your options might be a bit more limited as compared to something for a recorded deed. If you're losing sleep do a free consult with a bankruptcy lawyer rather than speculation by us Sea Lawyers.
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Old 10-07-2019, 06:50 PM   #6
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Quote:
Originally Posted by Filthy-Beast View Post
Also if doing a Chapter 13 repayment bankruptcy, you can keep vehicles out of it and keep paying them separately
Correct
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Old 10-08-2019, 09:45 AM   #7
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From a repo point of view you cannot have your vehicles or trailer/MH repoed while you have a BK case active. Just show the agent the paperwork if there is an active REPO. Also, if you live in a trailer/MH you cannot have it REPOED if you are living in it. They would have to go through the courts to get an eviction order.


I always found it funny how in CA if you live in a MH or 5th wheel you're considered homeless lol. Never understood that.
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Old 10-08-2019, 12:48 PM   #8
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They can't force you to sell your house but you certainly have to keep making payments if you still owe the bank. Once you stop making payments they will foreclose.

In Michigan you can exempt up to 35 grand in equity and up to 52 grand if you're over 65.

If your RV is your primary residence and you are current on the payments and you can convince the court you are able to continue payments you may be able to keep it.

If your RV is paid for then you may be able to keep it if it falls within the exemptions for your state.

You may also be able to use the Federal exemptions depending on your state.

But if you are behind in payments the bank can still repossess your RV.

Some banks will require you to reaffirm the debt, talk with a layer before doing that. There are pros and cons but a lot more cons.

Bankruptcy does not allow you to keep things that aren't paid for.

A lawyer is needed to walk you through the process, there are so many variables and scenarios that an internet forum can't possibly give you exact answers.

Hopefully it never comes to that but if it does there is plenty of support available online. Bankruptcy is not or should not be looked down upon if you fall on hard times. Businesses and corporations do it all the time but they are never shamed for doing it and neither should a family or individual.
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