My Parents are having financial problems, and are considering bankruptcy. They are both retired and receiving social security (that's it). They live in Virginia. I've told them both that they might as well just skip the bankruptcy and stop paying the credit cards that are harrasing them. They have some property, and there is a possibility that a lien could be put against it. What exactly happens, other than the lien having to be paid if the property is sold? Can the creditor force sale of the property? I've also told them to keep the money out of their checking account. This is one thing that could be frozen. Their cars are virtually worthless, and there isn't anything else of real value other than a little land, and it isn't all that great.
I don't think creditors can freeze an account until they get a judgment. Also, check to make sure your parents debts aren't past the SOL per Virginia law. I take care of my parents and in the process of refinancing their house (currently at about 10%) and got stuck paying off a lien from one their creditors before I could go on title to refinance the house in my name (creditor was a "sneaky little lawyer"). Dh's dad did a chapter 13 about 5 years ago, but since has amassed much more debt. Until recently, bk 7 for dad has always been the plan for us if any of these creditors were to get a judgment. Good Luck
Also sweet, kind of off topic but some useful stuff I have learned trying to get a grip on parents finances: -get their utilities under prorated programs for people with less income. Almost each utility company offers these programs, usually with no documentation. -get brand prescriptions not covered by medicare through the VA (if dad was a VET, VA offers some great benefits medicare doesn't) through the makers of the meds (pfizer and merck both have programs for seniors who need brand name meds) or through the state. ~Cindy
thanks for the info. Dad is a vet, but avoids the VA like the plague. Has a friend die and an uncle almost die at different VA hospitals. My biggest concern is possible forced sale. to me the lien isn't a problem immediately, unless they make them sell their place. For the home they are in they would have to wait until the original debt is satisfied. I do know they can't touch his disability check and social security check. Unscupulous CA's somehow have the ability to freeze checking accounts, so I've advised them to deal in cash. Unfortunately they don't really listen to me, but I'm very worried about them.
Sweet, I don't know anything about Virginia laws, but most often, creditors will have to get a judgment to get a lien. So at least you will have some kind of a heads up before they go to get a judgment, which they may never actually do. Whether they can or can't force sale once they get a lien is up to Virginia state law. In the last few years, I have constantly scrutinized my parents mail looking for notifications about creditors seeking judgment, they usually tell me bad news when it is too late. Fortunately, to date, none of the creditors have forced the issue. But if they had, because their is a lot of equity in the house, I probably would have done everything I could have to get dad to file chapter 7bk. Hopefully, your dad's creditors will figure your parents probably are not worth pursuing a judgment against, especially knowing that they can just file a chapter 7 on them and protect their house. If your parents have a lot of other assets outside of their home, the creditors will have more incentive to get a judgment knowing they won't be able to protect these assets with a BK. Sorry to hear about your dad avoiding the VA, but I would not rule that out. Out of pride, my dad has ignored the benefits from the VA, until recently. I finally got him to go and WHEW!!! What a difference. His cataract surgery that would cost $2k under medicare is covered. His brand name presciptions for fossamax and lipitor, not covered by medicare, now only costs $14 a month, instead of the $150 a month I was paying. I never imagined I would be 29 knowing so much about the medicare system.
I wouldn't dismiss out of hand the idea of filing bankruptcy. That would stop the harassing calls and there would be no issue about the impact of a judgment lien on their property. Whether a sale could be forced depends on state law. Every state provides some amount of equity that is exempt from creditors. Still the creditor might be able to force a sale as long as your parents are paid the amount that is exempt from the sale proceeds. There may be procedures for recording a homestead which they should do if available in your state. Anyone inheriting the property will take it subject to the lien and will have to deal with it. (Another good reason to file bk). Also it is better to file bankruptcy before a lien attaches. This is because bankruptcy does not always eliminate liens on real property. It only discharges the personal liability of the debtor. There is a procedure in bankruptcy court to avoid liens in some cases but the rules are too complicated for a discussion in this forum. My vote would be that your parents file bk before anyone gets a judgment so that they can enjoy their golden years without worrying about lawsuits and liens. This should not be construed as legal advice. You should contact an VA lawyer knowledgeable in bankrutpcy.
