Expert: Mark J. Markus- California Bankruptcy Attorney - 7/9/2009

Question
I am in the process of gathering all the information I need to meet with an attorney and start the proceedings for a Chapter 7. I have 2 questions for you:

1) I heard that in order to keep your house, you must be current on the mortgage, what about the Home Equity Line Of Credit? I just got current on the 1st but I am about 4 months behind on the equity line. I reside in Florida do I need to be current on that mortgage? Between both mortgages I owe more than my house is worth. My 1st balance is approx $203,000 and the Heloc is $65,500 and my house is worth approx $215,000

2) I am a full-time college student and have recently received student loan money (within the last 30-days). I get the money direct deposited from the college into an account they are affiliated with (totally separate from my personal account). I have used the majority of the money for school and the rest will be used for personal bills/expenses. My question to you is: if my parents were to ACH money into that account in the next couple of days ($1100.00-$2000.00 and I used it to pay bills, pay for the BK etc. would the trustee consider it a loan, even though my parents are giving me the money and what info would I need to supply the attorney with?

Answer
1.  There is no requirement to be current on your mortgages prior to filing a bankruptcy case.  However, if you are behind, you will have to catch up within the time frame prescribed under your state's laws or the mortgage lender can foreclose on the property.

2.  It's either a loan or a gift.  The Trustee doesn't make that determination.  If it's a loan, you should enter into a loan agreement.  If it's a gift then you will need to include that income in the means test analysis.


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