Multiple Problems! Help!

[Kattaway]

What is the name of your state? Texas

My husband and I considered filing bankruptcy about two years ago. He had a good job (autobody technician) that just went downhill and our income suffered badly. Needless to say, our credit cards got behind so we could pay the necessities but even this year, we had to cancel our health insurance through his employer as it would save us about $500 a month. We put a retainer down for a lawyer but it got so bad that we couldn't even make monthly payments to him and we let our Jeep go back and bought a cheaper car (with money from my father in law). I am still wowed at how your annual income can go from $60,000+ to under $40,000 in one year.

Okay, here are the tricky parts. The house we live in was purchased by my mother in law in 1997. She passed away in 2001 without a will so my father in law now has ownership and is wanting to sign the house over to us. We do not want him to until we know what we are doing with bankruptcy and if we are even filing. There is NO bank lien on the house but we still do not know what will happen to this house if we file.

AND to make matters more interesting, my husband used to have an inheritance account shared by him and his grandfather that is over $60,000 which he's had since he was a young boy. When my mother in law fell ill, the grandfather took my husbands name off the account because he suggested giving her that money for our house she purchased but the grandfather did not want the money left to the father in law (long story) so he removed my husbands name from the account. That money will now be willed to him upon the grandfathers passing.

So, we sit here in about $30,000 in debt now with the repossession on our hands with no money to pay it. What advice would you have for us. Should we file or could this house and inheritance be a burden? Should we wait until we have the inheritance and then pay off our debts? We just do not know what to do!! Please help!

[bigun]

All equity in a home is exempt in Texas. Plus, it's not illegal for the owner of an account to remove someones name. Particularly since this semmed to have happened several years ago.
That being said, I don't think I'd do any property transfers until the bk is done.
Not trying to be judgmental but, you're making 40K and don't have health insurance expense and you're not paying your bills you still can't pay for a lawyer?
BK will wipe out those unsecured debts but, if you aren't paying those anyway you'll still be in trouble post bk. You 2 really need to start budgeting better and increase your income.

[Kattaway]

Thanks for your input. But, let me clarify a few things...I said we are making LESS than $40,000 and we are working hard to pay off this house to his dad with our monthly income instead of waiting for the inheritance. Just because there is no bank lien on the house does not mean there isn't a personal lien. I also did not say we are NOT paying the credit cards, we are paying what we have left over each month after the house payment, bills, medical bills (which my son IS covered but due to a congenitial cyst on his brain...racks up the $). My husband does autobody work which means he earns a commission, not a steady income and I only make about $12,000 a year because my lack of college and being in a dead end job and the need to be home to care for my son who is sick a lot. It's hard for me to keep a solid job with a sick child. Sometimes my husbands checks can be $1800 every two weeks, sometimes when it's slow, as low as $800 every two weeks. We never know how his check will look and it seems as soon as we catch up, things slow down. We put money back during the high ends to help for the low times but it seems they always come. We just cannot get ahead and stay there for too long. We do not have an extravagant lifestyle. We have two older cars now, no boats, motorhomes or anything like that. We do not take vacations, I dont have jewelry or anything like that. My sons medical bills are the most costly bill we have but we HAVE to keep that paid because he HAS to have access to his local doctors and his neurological team up in Ft Worth. He has repeat MRI's every 3 months which his insurance only covers half of it and we are left with obout $1500 every 3 months, expensive meds which are NOT covered and not to mention lab testing and still paying off his shunt surgery (still owe over $10,000).

So, yes...we DO need to budget more but we do not see a way to dramatically increase our income right now. We are doing the best we can with what we have, when we have it.

I just needed to see if we should file or wait or what we should do? The house will be paid off in about 3 years and his father is already pushing to have it transferred into our names but we just do not know if that is the right thing to do right now. He is remarried and if something were to happen to him, his wife would end up as legal title owner to this house we were told. He does NOT want that to happen. She could make it a hard case for all involved.

Anyway, I just didn't want you thinking we are off "blowing and going" with our money. I wasn't asking for advice on how we live. Thanks!

[bigun]

Quick paying the cc bills and use the money for a lawyer.
I'd make no property transfers prior to filing.