Betty The Restauranteur

[Ghel]

Effectively, yes. And we won't be able to respond because of privacy laws.

[Marmalady]

So... there's a foreclosure, the restaurant closes, the employees lose their jobs, and Betty and her husband can just say it was all the fault of the big nasty bank?

[Ghel]

Did I read that right? He actually wants to go through a foreclosure.

That's how it appears to me. I'm not sure how credit-savvy he is, but he might realize that the restaurant loan isn't in his name, so it won't ruin his credit if we foreclose, only Betty's.

.... wait a sec. I just remembered something. We don't report commercial loans to the credit bureau. So even though the restaurant loan is in Betty's name as an individual (the restaurant isn't incorporated), the foreclosure won't hurt Betty's credit, either. So basically, there's no ramifications for them if we foreclose. Except that they lose their business, which as far as we can tell, isn't making money anyway.

[taxguykarl]

They put you in jail for tax evasion.

I could have gotten him off the hook with the IRS--not cheap, but less than $20k.

I doubt they'll come up with the money, mostly because Betty's husband doesn't want to.

Did I read that right? He actually wants to go through a foreclosure.

[sirwired]

Like my mother always said: We don't always get what we want...

Maybe Mr. Betty wouldn't have to contemplate selling cows if they didn't keep dumping cash in Betty's Unprofitable House 'o Magic Beans. (Are his cows "As White As Snow"? (ala Into The Woods))

[Ghel]

Betty and her husband came in today to sign the renewal documents on their house loan. They were really quiet while I went over the documents and got the check for the closing fees. But when I was done, Goodhair came in to talk with them.

Betty said the family's lawyer was going to court today regarding the inheritance, and she hopes to hear something back today. Probably because of this, they said again that they don't want to do a second mortgage on their house to pay the real estate taxes on the restaurant. Goodhair was firm with them that they need to have a plan to pay the real estate taxes, and we need to know soon or else we'll have to foreclose. Betty's husband said, "you don't need to foreclose yet" (as if he knew). Goodhair tried to explain that it takes months to foreclose, but Betty and her husband just brushed it off. The husband said he could just sell some cows if he had to, but he doesn't want to. (He said the same thing the last time I renewed their loan.) Finally, Goodhair said he would give them until June 15 to make arrangements to pay the real estate taxes, or else we would have to foreclose.

Then he had me draft a letter saying the same thing, and cc the law firm we'll be using for the foreclosure.

After giving them chance after chance, we're still giving them another two weeks. I doubt they'll come up with the money, mostly because Betty's husband doesn't want to.

[earl colby pottinger]

Mom's Will

That's exactly what you want to do. If you leave someone nothing that allows them to claim you weren't competent and allows them to challenge the will. If you leave them something just large enough to not be an insult (like $5) then it shows you didn't forget them and makes it a lot tougher to fight the will in court.

There's an old story about just that but it's a long one and I don't want to threadjack...

My mother left something to all my brothers and nieces except for one brother.

The lawyer insisted that she could not just not say that he inherits nothing with no reason since everyone else got something. The will could be challenged then, so she had to add into the will her reasoning why he was not to receive anything.

She was very clear about it, and when he insisted on having a copy of the will I am sure he took it to a lawyer and was told her wishes were very clearly written out.


PS. Please start another thread and post that story. i would like to read it.

[earl colby pottinger]

Well

$1 million seems fair to me. That's enough for a decent house, a decent car, a college education...hmmm...

He expects they will not collect for years, and he also left them a seat on the board of directors that means they get paid if they show up for work. But get nothing extra if they don't.

The one million ensure they will never starve unless they are careless idiots, and the seat on the board insure they will get paid more money if they do the min. amount of work needed. But no inheriting billions of dollars to live the life of rich lazy bums.


I like it.

[Tama]

$1 million seems fair to me. That's enough for a decent house, a decent car, a college education...hmmm...

[eltf177]

Bill Gates left only $1,000,000 to each of his children, which of-course is nothing compared to his worth.

Better yet, B.B. King left only $5,000 to his children/relatives and the rest to charity. He left just enough that the courts would not say he did not know what he was doing, but little enough that is clear to the people receiving the money that he did not want them to benefit from his death.

That's exactly what you want to do. If you leave someone nothing that allows them to claim you weren't competent and allows them to challenge the will. If you leave them something just large enough to not be an insult (like $5) then it shows you didn't forget them and makes it a lot tougher to fight the will in court.

There's an old story about just that but it's a long one and I don't want to threadjack...

[earl colby pottinger]

New way to write wills?

I was eating my lunch when a gentleman walked up. He had a few questions about the vault which I answered. All of a sudden there was a lot of laughter from the gravesite. I made some comment about respect and he just shook his head. Turns out he was the lawyer for the deceased and these people were his relatives who were anxious to hear the will expecting a big payday. "They're going to be very disappointed, he left it all to charity." I had to laugh, and asked if he was going to tape the reading for America's Funniest Videos. He wished he could but said his staff was going to attend, the family was probably going to go berserk!

Bill Gates left only $1,000,000 to each of his children, which of-course is nothing compared to his worth.

Better yet, B.B. King left only $5,000 to his children/relatives and the rest to charity. He left just enough that the courts would not say he did not know what he was doing, but little enough that is clear to the people receiving the money that he did not want them to benefit from his death.

[Sapphire Silk]

here's the irs story...

Yeah and to be fair, I don't trust even one word betty says.

Nice.

They put you in jail for tax evasion.

[Immortal1982]

here's the irs story...

Yeah and to be fair, I don't trust even one word betty says.

[Tama]

From what the guy said, he was able to claim the writeoff as "bad debt"...and yeah, what karl said.

If you have debt and it is cancelled it is considered income.

[taxguykarl]

why did forgiving the loan put the guy in the hole so much?

Cancelled debts are (with a few exceptions) taxable income. See also Publication 4681. He may have been able to avoid those taxes by claiming insolvency, yes even without a BK filing, with Form 982, as many people, unfortunately, have a zero or negative net worth.