# Bankruptcy and your floating home



## zboss (Mar 26, 2006)

Hypothetically here...

1) We were out cruising with no health insurance
2) myself or wife had a serious medical issue
2) we had no land-home
3) All your assets are in your floating home
4) We are in the territorial waters of the US or have been able to reach a US hospital

...and we could not afford the bills... could they take your boat?


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## RobGallagher (Aug 22, 2001)

For the most part, without insurance you will not get treatment beyond keeping you alive for the moment.

Yes, you could possibly get the surgery or the stints or whatever, but the bills will come and your credit will be ruined. Don't believe the hype that medical bills cannot effect your credit because they can.

If you have something that needs ongoing treatment I hope you have cash or credit cards.

Then there is the physical therapy, transportation, prescriptions to fill.

The good news is that they can't bill you for the services and medicine they won't provide without cash up front. 

If you are lucky you might be near a hospital that works on charity cases, sadly that is what you will become. If you need a flight....lol...you think there airline fees are out of line now...

Without health insurance you are porked. The good news is that without a few hundred thousand in savings to blow through you will probably be dead so you won't need a boat.


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## carl762 (Jan 11, 2010)

Get insurance!!

For example, mid-life checkup for me is at $10,000 and counting, probably another $3,000 to $4,000 and we're done. I pay 20% of that, and that's still a lot of money for a little guy like me.


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## jameswilson29 (Aug 15, 2009)

It depends.

Hospitals are required to provide emergency service to you if you show up at the door.

By statute in Virginia, a spouse is liable for his or her spouse's emergency medical services and, by another statute, for necessaries, which could include necessary medical service, so both of you may be liable for the bill, even if only one of you requires medical service.

You are allowed to protect certain property from your creditors, in or out of bankruptcy. These laws are known as exemptions because the property is exempt from creditor process. Each state can either accept the federal bankruptcy exemptions or "opt out" and limit its residents to the state law exemptions and other non-bankruptcy federal exemptions. Virginia has opted out of the federal bankruptcy exemptions.

Your exemptions in bankruptcy are determined by where you have lived the last two years, or if you have lived in more than one place, where you lived the six months prior to that. You would probably default to the federal bankruptcy exemptions if you are not able to claim any other.

If you file a chapter 7 liquidation, you may lose the boat to liquidation by the chapter 7 trustee if it is not protected by your state law exemptions or the federal bankruptcy exemptions. Under the bankruptcy exemptions, each debtor can protect up to $21,625 in value in real or personal property that the debtor or a dependent uses as a residence, including a boat. Under Va. state law, each resident can claim $5,000 plus $500 for each dependent under the Homestead exemption, which increases to $10,000 when you are 65 or older, or $15,000 if you are a veteran with a service-related disability of 40% or more.

If you file a chapter 11, 12 or 13 plan bankruptcy, you can keep the boat, even if it has value that is not protected by your exemptions, but you must pay your creditors at least as much as they would receive if you liquidated.

You should check to see if you can hold title to your boat in your jurisdiction as tenants by the entireties with the common-law right of survivorship, which may protect it against the claims of the creditors of one spouse alone.

Even though you are living on a boat and you may intend to travel the world in the future, you may still establish or retain your legal domicile, or permanent home to which you intend to return, in a particular state, and you may want to investigate which state would be most favorable to you given your circumstances.

This is general information, not legal advice, and you should consult with a lawyer in your jurisdiction to discuss the applicability of the law to your particular facts.


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## Andyman (Jul 20, 2007)

zboss said:


> Hypothetically here...
> 
> 1) We were out cruising with no health insurance
> 2) myself or wife had a serious medical issue
> ...


Were you ever in the service? If so, you can get care at any VA hospital and if you're broke, they won't charge you.


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## Mark1977 (Sep 29, 2011)

I am soo happy to be Canadian. The cost of health care in the US out of control. [of course only works while i'm in Canada]


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## carl762 (Jan 11, 2010)

> The cost of health care in the US out of control.


I'm sure learning that the hard way. I miss my HMO plan, badly, where I would have probably only have had to pay out $50 versus this mess I'm in now.


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## Dog Ship (Sep 23, 2011)

My health care costs me $68 a month. I'm going to stay in Canada.


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## killarney_sailor (May 4, 2006)

If you are out cruising and you do not have health insurance, stay away from the US. Your chances of being able to pay for care elsewhere are much better. I was treated at the lovely new hospital in Papeete, Tahiiti and had the attention of doctors and nurses for about an hour and a half and it cost less than $60. At the clinic in Mangareva I went in about 5 times to get dressings changed (English-speaking French doctor) and they did not charge at all.


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## HeartsContent (Sep 14, 2010)

Canada needs to conquer some tropical islands so we can cruise the CVI! 

The challenge with national health care is that it's rationed so many die waiting for care or are told the government has decided that you don't need care. Essentially leaving you uninsured and have to go to the US and pay out of pocket. There's just no win. 

Well other than having good private insurance!



Mark1977 said:


> I am soo happy to be Canadian. The cost of health care in the US out of control. [of course only works while i'm in Canada]


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## puddinlegs (Jul 5, 2006)

HeartsContent said:


> The challenge with national health care is that it's rationed so many die waiting for care or are told the government has decided that you don't need care. Essentially leaving you uninsured and have to go to the US and pay out of pocket. There's just no win.
> 
> Well other than having good private insurance!


I've lived, payed into, and used both the Japanese and Canadian health care systems as a US citizen while living outside of the US. Besides my own experiences with broken bones, concussions, vertigo, food poisoning, influenza and the like, I've had friends in Japan treated for lymphoma, ovarian cancer, traumatic accident injury, diabetes, etc.. I never had any problem seeing a specialist or GP, nor was I ever on a long wait list for treatment. In British Columbia, there are waits for certain type of surgeries, particularly things like knee/hip replacements, but again, I don't know anyone that I know in BC that has had care denied or any that would leave BC Care for our coverage in the US. Bear in mind that Canadian provincial health care programs are not all created equally, yet a few years back, Canadians voted the founder of their health care system the most important person in Canadian history. Our system in the US is fantastic for the well insured, but our infant mortality rates, cancer morbidity for the under insured, life expectancy. etc... tells a different story. The great thing in both systems mentioned is that you're seamlessly covered if you change jobs. It's great for the small independent business man or woman as well as everyone's in the same insurance pool... no 'divide and conquer' for profit. In the end it's a cultural issue. Health care is either for profit, or it's not. I understand that many are fine with our system as it exists, but the idea that people are routinely denied care and die in 'national' systems just isn't factual.


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## johnnyandjebus (Sep 15, 2009)

puddinlegs said:


> .
> .
> .
> I understand that many are fine with our system as it exists, but the idea that people are routinely denied care and die in 'national' systems just isn't factual.


At the risk of sending this thread over to OT land l'll throw my own two cents in on this.
I agree wholeheartedly with the above. Here on Ontario the more severe the condition the better/faster the care/access. The lower in severity the condition is the longer you have to wait and believe me it can be a long wait.

John


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## captflood (Jan 1, 2011)

GREETINGS EATHLINGS . Now then now then I you had stayed a British colony this woud not have happened Oh I'm Glad to be English but sorry to hear about your woes can you put you vessel into a trust fund to stop the repossetion you may have to look into the legality of it all GOOD LUCK GO SAFE AND KEEP YOUR BOAT


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## emoney (Jun 2, 2010)

Each state is going to be little different as it applies assets and "home ownership" to the boat, I'd imagine.

Having said that, please give the generation of us still in our 40s and younger, at least, a chance, even if it's miniscule, at retirement by being somewhat responsible and purchasing health insurance. Every time someone "figures out a way to beat the system", my back hurts a little bit more.


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## dhays (Jul 9, 2010)

puddinlegs said:


> I understand that many are fine with our system as it exists, but the idea that people are routinely denied care and die in 'national' systems just isn't factual.


Yeah, but what fun is there in sticking to facts? Ignorance and fear mongering are just so much more entertaining. 

I make my living providing health care to my patients. I don't think that health care is a "right". I don't think it is society's responsibility to provide cradle to grave healthcare for every fool out there.

However, I would *prefer* to live in a society that provided reasonable access to health care for all it's citizens. Our current US system is broken and nothing short of a major overhaul will deal with the problems we face. So despite my feelings about individual responsibility and my desire to have independence in my practice, I think a single payer health care model is the only rational alternative. The Government already pays for about 60% of the total health care in the US so the oft touted fears about Government controlling health care are rather stupid. The Government already does.

So, to the OP. If you like to gamble great. Don't carry insurance on your boat, and don't carry insurance on yourself. Just don't expect me to want to pay to provide medical care to folks who I can only describe as "freeloaders".


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## Tim R. (Mar 23, 2003)

Just throwing this out there. I think in Florida, Texas and a few other states a bankruptcy cannot take your house/home. If true, does this apply to a boat if it is your primary residence and you are a legal resident of one of these states?


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## hellosailor (Apr 11, 2006)

"they" can always take your boat. Medical bills don't matter, what state or country you are in don't matter, someone (your mysterious "they") can always find a reason to file a lien and seize your boat.

Now if you narrow your question down to something specific like "Will San Diego General pursue me for medical bills and then file a lien to seize all the assets and titled property that are in my name?" well, you'd have to go research California laws as well as those of whatever state your boat was from.

But as loing as the question is a very vague "they" in no particular location, sure, THEY can seize your boat and everything else you own, unless you fall into some kind of local exemption.


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## luck66 (Jul 4, 2011)

Some years ago I put a lien on a large fishing boat, it was paid for. The owner of the fishing boat moved it to another state, and registered the boat . When I called the new state, I was told the lien does not cross state lines, and I would need to file a new lien in the new state, but first I would need to reserve the boat owner.


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## dhays (Jul 9, 2010)

luck66 said:


> Some years ago I put a lien on a large fishing boat, it was paid for. The owner of the fishing boat moved it to another state, and registered the boat . When I called the new state, I was told the lien does not cross state lines, and I would need to file a new lien in the new state, but first I would need to reserve the boat owner.


Interesting. Was the boat documented? I know that mortgage holders are listed on the USCG documentation but I don't know about a lien.


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## xymotic (Mar 4, 2005)

dhays said:


> Yeah, but what fun is there in sticking to facts? Ignorance and fear mongering are just so much more entertaining.
> 
> I make my living providing health care to my patients. I don't think that health care is a "right". I don't think it is society's responsibility to provide cradle to grave healthcare for every fool out there.
> 
> ...


this is the crux of the issue though: you ARE paying for it now. if it's higher premiums, ot taxes, or higher prices, it makes no difference. in the us we have the worst of all worlds, prices so high that most can't pay, costing more for peopls who can and the taxpayor still bears the rest of the burden


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## Sabreman (Sep 23, 2006)

> It's great for the small independent business man or woman


Sorry. It is not great at all. As part owner of a small business that employs 15, we routinely face premium increases of 30%-50% year after year. And are then dumped because the insurance company no longer offers the plan that was affordable.

One problem is that there are very few incentives for a subscriber to save money. When one doesn't even know the cost of service, why should they shop around? By contrast, my wife is involved with animal rescue. Her organization shops for veterinary care and uses the lowest cost providers for specific situations, just like any other consumer. If US consumers had to actually pay for service, they would be a lot more discriminating.

*Retorical question*: Does anyone actually know what their employer pays for their insurance? *Answer*: A typical family plan costs about $13,000/yr. An individual plan costs about $9,000. So I have to bring in nearly $200,000 in revenue just to pay this one overhead item. In real terms, it represents about 1.5 people that I could have hired.

I have a large number of family who are Canadian. They all receive great care and no ever died from lack of care. One had to wait a few months for a hip replacement. In the US, one would have to wait too.

I am not political and do not mean to hijack the thread, you all know me. But runaway health care costs are killing my company and from a macro perspective, hindering the economy.


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## xymotic (Mar 4, 2005)

He was saying 'it's great' in Canada and Japan 



Sabreman said:


> Sorry. It is not great at all. As part owner of a small business that employs 15, we routinely face premium increases of 30%-50% year after year. And are then dumped because the insurance company no longer offers the plan that was affordable.
> 
> One problem is that there are very few incentives for a subscriber to save money. When one doesn't even know the cost of service, why should they shop around? By contrast, my wife is involved with animal rescue. Her organization shops for veterinary care and uses the lowest cost providers for specific situations, just like any other consumer. If US consumers had to actually pay for service, they would be a lot more discriminating.
> 
> ...


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## Sabreman (Sep 23, 2006)

Remember Rosanne Rosanadanna? Nevvvvver Miiiind...... :laugher


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## dhays (Jul 9, 2010)

xymotic said:


> this is the crux of the issue though: you ARE paying for it now. if it's higher premiums, ot taxes, or higher prices, it makes no difference. in the us we have the worst of all worlds, prices so high that most can't pay, costing more for peopls who can and the taxpayor still bears the rest of the burden


Yup.


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## dhays (Jul 9, 2010)

Sabreman said:


> Sorry. It is not great at all. As part owner of a small business that employs 15, we routinely face premium increases of 30%-50% year after year. And are then dumped because the insurance company no longer offers the plan that was affordable.


I agree. While I am a health care provider, I am also a small business owner who employs about the same number of folks that you do. My premiums for my staff have been increasing the same amount as you. It is a killer.



> One problem is that there are very few incentives for a subscriber to save money. When one doesn't even know the cost of service, why should they shop around? By contrast, my wife is involved with animal rescue. Her organization shops for veterinary care and uses the lowest cost providers for specific situations, just like any other consumer. If US consumers had to actually pay for service, they would be a lot more discriminating.


My family is covered under my wife's insurance. the programs have been changing every year. This year, we were offered three options. The cheapest had the highest annual deductibles. This is by far the best option, insurance should cover you for what you can't afford to pay yourself, but my wife found that many of her fellow employees picked the more expensive plan because they were seduced by the low deductible and small co-pay.

The reason we have the system we do now in the US is because of the strength of unions during the 50's and the strong post-war economy in the US. Empolyees and employers alike liked the insurance idea. Employers were able to write off the cost and the employees didn't have to pay taxes on the benefits. Premiums were low and costs were low because of the low-tech nature of health care at the time.

BTW, the cost to the US Federal Government due to the non-taxed nature of health insurance premiums is a couple hundred billion dollars.


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## emoney (Jun 2, 2010)

Until we find a way, in the U.S., to STOP, once and for all, the pocket lining of our elected o-criminals (politicians in case it wasn't clear) from the Big Pharms and Good Old Boy Insurance rackets, nothing is going to happen but the increase of our suffering. Greed is what's killing this country: plain and simple, pure and true. Greed is the reason why 1/3 of marketing is targeted toward us suing someone. Greed is the reason that Big Pharm pulls the inexpensive drugs off the market in favor of something equally effective that costs 1000% more. A huge part of the reason why our elected officials have seen a several hundred percent increase in their personal net worths during this, the worst recession in history, is because of greed.


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## luck66 (Jul 4, 2011)

dhays said:


> Interesting. Was the boat documented? I know that mortgage holders are listed on the USCG documentation but I don't know about a lien.


The boat was paid for there were no mortgage holders, yes it was uscg documented and had a commercial fishing license.


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## neverknow (Feb 2, 2011)

Right now we live in the middle of Indiana. However in 2 yrs our plan is to sell out and live the dream in the islands.

Not sure how it is everywhere else in the USA but around here all the hospitals and doctor offices have been rebuilt in the last 5 years. Gone are the simple inexpensive brick buildings, replaced by granite and marble with waterfalls inside 3 story glass entrances. One doctor told us that when the new hospital in his town opened he would have to increase his fees by 50% just to pay his new fees. It's much the same story with public schools around here that spend a million dollars on a football field than ***** that they can't pay teachers. 

So we are hoping that getting away from these palaces we'd find lower cost health care. 

We are sure we'll still have to carry health insurance while anywhere near the USA.

However the funny thing is that if we added up all the money we have spent over 30 years on all the insurances we have carried (car, boat, house, life, health, business etc) we could probably burn everything we have now and still have money in the bank had we not gotten hooked on insurance in the first place.

To answer the OP question, yes they can take your boat or at least send a bill collector out to haunt you and or sue thus making you get a lawyer to defend yourself. Lawyers are not cheap either...lol


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## puddinlegs (Jul 5, 2006)

dhays said:


> I agree. While I am a health care provider, I am also a small business owner who employs about the same number of folks that you do. My premiums for my staff have been increasing the same amount as you. It is a killer.


Dhays, I was refering to Japan and Canada, not the US. The US system simply divides and conquers for profit. Small businesses, businessmen/women and start ups are essentially penalized for pursuing the American dream, or a worker who pursues a new opportunity... most companies offer no coverage for the first 1-3 months. Fine and dandy, just hope you aren't diagnosed with cancer, and keep your kids off the playground.


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## Slayer (Jul 28, 2006)

Interesting question. Under the Federal Bankruptcy Code, and individual has an exemption (property that they can keep) of $20,200 "in value, in real property or personal property that the debtor uses as a residence...that the debtor or dependent of the debtor uses as a residence..." So withouth having done any research other than reading the statute, if your boat is you and your wife's full-time residence you can have up to $40,400 of equity in the boat and be ok.


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## jameswilson29 (Aug 15, 2009)

Slayer said:


> Interesting question...So withouth having done any research other than reading the statute, if your boat is you and your wife's full-time residence you can have up to $40,400 of equity in the boat and be ok.


That's correct - a couple can protect $40,400 in equity above the payoff on any financing on the boat, plus, each spouse has an additional $1,150 in a wildcard exemption if not used for something else, for a potential total of $42,700 under the federal bankruptcy exemptions. 11 U.S.C. 522(d).

Some of the other, available, non-bankruptcy law exemptions are covered on my blawg (which is probably not half as interesting as the sailing blogs shown on the forum):

exemptions « Search Results « The Interplay Between Bankruptcy and Divorce Law in Virginia


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## zboss (Mar 26, 2006)

Andyman said:


> Were you ever in the service? If so, you can get care at any VA hospital and if you're broke, they won't charge you.


No... never served. This really was a hypothetical question.

I never expected this to turn into a canada/us fight over actual insurance or medical care! The question was really about cruising preparation... what and how much insurance my wife and I would have to carry once we are no longer covered under my high-deductible work insurance and what the implications of not being covered.

I plan on retaining DAN which I keep for my wife and I for scuba diving but was doing some insurance quotes from independent insurers and it was astronomical.

I guess the answer to this is have insurance but don't have a heart attack! I am guessing that would ruin anyone's cruising plans.


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## JanetGroene (Sep 5, 2011)

Whether or not they can take your domicile in a bankruptcy depends on state law.


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