restructuring secured debt prior to bankruptcy

May 10th, 2006 by Questions

I have large $100k debt of personnal debt from a failed business of which I was an investor (basically it was a con…but this is beside the point). I have no other debts, and never have, not even credit cards, other than those secured against my home (that were for my initial investment in the business). I am reading all I can, and looking at proposal (and therefore bankruptcy if it fails). In the meantime, I want to re-organise my secured debts (which are currently mostly with a bank). I know I can’t have a loan from a family member if it is within one year of proposal/bankruptcy, but is it safe to have a loan from my ex-husband (separation agreement signed 4 years, final divorce through about 4 months ago)? I want to do this for a few reasons, the main one being that we (me and my ex) both have a strong interest in ensuring that whatever happens the children (3 of them) are able to stay in thier home, their school etc. I have worked out the numbers, and feel I can pay the morgage I would set up with him through my wages even in worst case, I just want to make sure before I do this that he is not treated as a “family member”.

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One Response to “restructuring secured debt prior to bankruptcy”



May 10, 2006 at 10:39 am, A licensed trustee said:

Yes, it is possible to do what you are describing.

However, restructuring secured debt is complicated. If you do it incorrectly it will negatively impact on your proposal or bankruptcy, so I strongly recommend that you contact a licensed trustee to review your situation in more detail before you make a final decision.

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