Expert: Terry Leeders - 8/23/2007

Question
we had a self employed business that went sour and have been in financial troubles for many months now. our house is in foreclosure and we put it up for sale. we have a buyer and is scheduled to close in a couple of weeks. During the closing process we found out that one of the credit card companies has put a default judgment against us and have been told that it will need to be paid prior to closing (dont understand that, thought it was unsecured credit card). We are supposed to be getting back a little bit of money from the sale of the house but it was going to only be enough to find a place to live and pay a few months of rent while we search for jobs. Neither myself or husband currently have a job. We have other credit cards that we owe on and have ignored there attempts to contact us and are afraid something again might get attached to the property. When can we file for bankruptcy? Can we file now, right after we transfer the property or with getting proceeds do we need to wait a certain time period? Your help is greatly appreciated!

Answer
The credit card company has a judgment lien against the home, thats why it needs to be paid at closing.  You can file bankruptcy at any time, each state has a homestead exemption to protect some equity in the house or proceeds from the sale. Therefore, you should seek a local bankruptcy attorney to help guide thru the right steps to take to make things go smoothly.  I am licensed in Illinois. Thanks.