LAA the tractor is HIS DAD's until the bank takes it back. All I am wanting to do is get the tractor back in the family's control. Then deal with the bank.
As for the father declaring bankruptcy. In the long term he and the bank will be better off to solve the problem the best they can NOW, not drag it out for years and years.
I was on a local banks loan board for many years. We had a guy that we had to foreclose on. HE mainly just hit a string of bad luck that put him under. HE refused to take bankruptcy. So he forced the bank to keep the loans open. He forfeited all the secured collateral plus sold everything else. There still is over $800,000 dollars left owed to the bank. This is the old principal amount and back interest. The loan's interest rate was a fixed rate loan from the early 1990s. It is locked in at 12%. So that is $96,000 dollars each year in interest only. HE will never be able to pay it off. Plus it is dragging him down from ever getting ahead. He pays maybe $4000-5000 on it each year out of his town job. Now the hard thing for many to understand. Since he is still making a small payment the bank can not write off the loan. So it show on their books. Every time they are audited by the FDIC they are questioned about this bad loan. It also messes up their foreclosure ratio at the FDIC. So the few dollars he sends them each year is actually costing the bank money. If they could write it off they could use that loss to off set some income for tax porpoises and then actually have more funds to re-loan.
Also the money he borrowed/lost years ago did not just disappear. Those dollars went back into the economy. HE spent them buying things or services. So they are in circulation.
As far as him mortgaging that old tractor. These days if you are borrowing general operating money you are going to sign a BLANKET mortgage on all of your personal real property and equipment. Even the 20 or fifty year old stuff.
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Today's Featured Article - Oil Bath Air Filters - by Chris Pratt. Some of us grew up thinking that an air filter was a paper thing that allowed air to pass while trapping dirt particles of a particles of a certain size. What a surprise to open up your first old tractor's air filter case and find a can that appears to be filled with the scrap metal swept from around a machine shop metal lathe. To top that off, you have a cup with oil in it ("why would you want to lubricate your carburetor?"). On closer examination (and some reading in a AC D-14 service manual), I found out that this is a pretty ingenious method of cleaning the air in the tractor's intake tract.
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