Betty The Restauranteur

[Thud-n-Blunder]

I think that the deal with force-placed insurance is that, since the risk is high (not so much from threat to property as the chance of foreclosure) the insurance premium is commensurately higher - and the bank gets the payout first if there is some form of disaster.

I base this on my time with a company that handled flood insurance. In certain areas it is required in order to get Federally-backed loans for the property. The rate for force-placed insurance was about 5 times the normal rate. Ouch!

[taxguykarl]

As my dad was in the insurance business--I find it hard to believe that any insurer will write a policy for them with their payment history.

Keep us posted, Ghel.

[Ghel]

Supposedly, the insurance agent is back from vacation now. But I don't count that as an excuse. We've had force placed insurance on the house for years. Every year, or every time we've advanced on her home loan to pay the insurance premiums, we've sent her at least one letter (two with the new regulations) saying how much we were advancing on the loan, and in big bold print "this insurance will cover only the bank's interest in the property, and not yours." So she's actually had years to get insurance.

But I doubt she reads the letters we send her anyway.

[Thud-n-Blunder]

There's only so long you can keep juggling before everything starts falling.

[Aragarthiel]

So her insurance agent is on vacation, and she needs insurance by the middle of the month. Unless she can magically get all of the necessary papers filled out and turned in the second he gets back, it looks like she's screwed.

She's screwed.

[Ghel]

Betty dropped off her 2011 tax return this morning, so I called her at the restaurant to get an update. Here's what she said.

• Her accountant will work on her 2012 taxes after the 15th (for those outside the US, that's the last day for income taxes to be filed, unless that person has filed an extension).
• Her insurance agent was on vacation, but she promised she'd follow up with them "soon."
• She only got $4900 in the lawsuit. I can see where the check was deposited to her checking account the middle of March, but the money has already been spend on her regular expenses. She didn't pay any of her past due real estate taxes with the money. She knows she needs to start making payments on the real estate taxes, but she didn't have a plan for how to pay them.
• Betty claimed that she's owed some inheritance from a relative who died in 2013, but she has no idea when she'll get it.

The 2011 income taxes showed a loss of almost $20,000 for that year. I have no reason to think it's any better now.

We have a pre-foreclosure letter out on the house that will expire the middle of April. If Betty hasn't provided us with proof of insurance by then, we will begin foreclosure. Around the same time, if she hasn't started paying the real estate taxes on the restaurant, we'll send a pre-foreclosure letter on that loan.

Betty has spent any goodwill we might have had.

[eltf177]

Regarding Betty's employees getting paid, one of her employees brings his paychecks to the bank to cash, and sometimes has to wait days or even more than a week before Betty has enough money in her account to cover it.

I doubt she's sending the withholding to the IRS. I'm pretty sure that's what some of the judgments listed on her credit report were for.

It makes you wonder how (or if) the other employees are getting their money.

The IRS is not going to be happy with Betty...

[Ghel]

Regarding Betty's employees getting paid, one of her employees brings his paychecks to the bank to cash, and sometimes has to wait days or even more than a week before Betty has enough money in her account to cover it.

I doubt she's sending the withholding to the IRS. I'm pretty sure that's what some of the judgments listed on her credit report were for.

[Tama]

They might try to take everything out of Betty, including employee tax stuff

[taxguykarl]

Oh yes, the IRS will take no prisoners - either Betty or her employees...

Maybe so, but they'll likely go easier on the ex-employees than Betty.

[eltf177]

*nods* More than likely. And the business about the tax payments is frightening to contemplate.

Oh yes, the IRS will take no prisoners - either Betty or her employees...

[Marmalady]

Probably "Oh, I'm going to lose my house and this is all I have and I need you to stay so the business can make money and I can pay my bills boo hoo!"

*nods* More than likely. And the business about the tax payments is frightening to contemplate.

[Aragarthiel]

I feel sorry for the employees - I wonder what she has been telling them to keep them working for her?

Probably "Oh, I'm going to lose my house and this is all I have and I need you to stay so the business can make money and I can pay my bills boo hoo!"

[taxguykarl]

IIRC, she was effectively cashing their paychecks out of the till. As to whether she was making the tax payments from the withheld amounts is another story--past posts suggest not.

[eltf177]

I feel sorry for the employees - I wonder what she has been telling them to keep them working for her?

Are they even still being paid?