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??'s about filing for ch7 or ch13


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Im not really sure how to begin with this, so here it goes.

About 1 year ago I fell victim to identity theft they managed to open 14 new accounts in 3 days. Well I knew nothing about it for months until the first bill arrived that set off a panic attack so I called to find out more info from the bank, this is the good part they said I opened 6 accounts with them. At this time i told them where not mine so they put a stay on all the accounts a flagged them as fraudulent and to report the use to the police. At that point I called the police to report it and they told me I would have to report it to the sheriffs dept. for each county they where opened in including the one I lived in, 4 total.

At this point I requested my credit reports, thats when I found the rest and had them flagged also.

Well very long story short I always made my payments on everything on time, but now with all these open accounts my real cc started raising my interests rates slowly 4 of them put a stay on the cards so that I would only be able to pay on them and not use them.

Shortly after this started happening we got hit by a hurricane that did alot of damage to the house (YES IM IN FLORIDA). I had to use the cards that I could use to make emergency repairs to the home. Well thats when it started I was late on some payments then a few more then they increased my min. payments, now I was in big trouble.

Shortly after the hurricanes I started getting letters that they had closed the fraudulent accounts and I started removing them from my credit reports. By this time the damage had been done I could not make some of my large payments the phone calls began and so on.

Basically this just shows how close to the edge I really was.

Yesterday I went to see a lawyer he recommended my wife and I file ch7. I know nothing about nothing when it comes to this, but he went on to ask what we wanted to keep, I said house and 2 cars. House is worth what I owe had it appraised when we refinanced, cars are not worth anything and I owe some still on both. But I guess the catch came when he saw my wifes wedding ring he said they would most likely take it, (THATS WHEN WIFE STARTS TO CRY UNCONTROLLABLY).I am giving up my toys both my boat and skies. OH I forget I have a baby on the way due Dec. and she will be taking a permanent leave from work to raise our child (DAYCARE IS TO EXPENSIVE).

At this point I guess my wife is in fear of losing her ring and the few little things that might put us over. The lawyer said they would come out to the house and look at everything.

Im just confused, I will not lose my wifes ring (NOOOOWAYYY).

Would a ch13 be better just for a ring and a few little things (TV , STEREO , SPEAKERS)

If anyone can give me some advice, please help. Im sure I missed something so ask all the ? you need.

Thanks for listening, and putting up with my bad grammar and spelling.

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Ok, so I have to ask.. what is so spectacular about your wife's wedding ring that the lawyer said the Trustee would take it ?? I mean, is she wearing a piece of the Hope Diamond or what ??

Fl has a 100% homestead exemption so they cannot touch your house. With the new laws for homestead exemptions in place though, if you haven't had your home for more than 40 months, the homestead exemption is capped at $125K. f

As for the ring, you DO have the option to REDEEM it - which means you pay the Trustee to keep it. If its really special, get it appraised, NOW, and get the appraisal in writing so you have a value to present to the Trustee if he/she thinks its worth more. The retail value is MUCH higher than what you'd get for it if you tried to sell it outright, jewelry has a HUGE markup.

Personal property exemptions in FL are pretty puny, only 2K for a married couple filing jointly and vehicle exmption is only $1000 (equity).

Did the lawyer explain the exemptions to you ?? If not, here is a list of what they are:


Ch 13 would probably allow you to keep ALL your property, but you'll be on a very tight budget for at least 3 years.

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Well my sister wants to buy the ring from us to keep it in the family. (GOOD OR NOT GOOD).

My Lawyer and the other 3 we spoke with prior to him all stated that this would settle for .20 on the dollar, so what kind of tight budget would I be under.

All the lawyers gave me about the same pay back amount, few $ apart.

Could Florida be diff. some how.

He said we lose no property at all unless we give it up. (boat & skis)

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Well my sister wants to buy the ring from us to keep it in the family. (GOOD OR NOT GOOD).

Ummm.. definitely NOT good. No transfer of property before you file, it could be questioned and the Trustee could take it back from your sister. You would be better off just trying to REDEEM the ring if the Trustee really does want it, that's why an appraisal would be a good idea.

If you're getting quotes for payback, they're obviously talking about a Ch 13.

What is a 'tight budget' ? Well ALL of your disposable income has to go to the plan payments. Some expenses may not be allowed as 'reasonable and necessary' by the Trustee and those $$ amounts would be added back into your disposable income. If you go Ch 13, make sure your budget has enough 'padding' in it to allow for emergencies, like car repairs or other unexpected expenses.

I've also heard of people getting payment estimates from lawyers and when it came down to the ACTUAL payment it was much higher, so you need to ask the lawyer just how confident he/she is what that number.

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The lawyer said they would come out to the house and look at everything.

Wait a minute...who would come to your house? Unless you're living in million dollar house and owe several million to unsecured creditors, that doesn't happen. BK trustees don't inventory. There are exceptions, but for the most part, they rely on your schedules.

I'd suggest you see one more lawyer...and have your wife lose the ring for awhile. Don't wear it to see the lawyer and don't where it to the 341 meeting. On your schedules, just list "jewelry" at whatever FL allows...if you owe anything on the boat and skis, let them be repo'd...if they're paid off, let the trustee take them...

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There may a rule that no single item can exceed $400 in value. It may not apply in FL, however jewelry is considered a luxury item. Trustees reserve the right to inspect property in Chapter 7 cases. Should the ring prove to be a problem get approval from the Trustee before transferrance to a relative and the reasonable sum collected would be offered to repay creditors.

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It just seems like BK is worse than just dealing with the bills.

Wife is 3 months pregnant, how would I account for the expense, no baby yet.

Im a mechanic, are tools of the trade exempt in FLA. I have more money in tools than people have in their homes.

They told me that an appraiser would come out, hell they give everthing a value so high I would not have anything left. FLA exemptions per person 1000, give me a break.

The boat and ski's are all theirs CH7 or CH13, they can keep them. Ill bring it to them!

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Yeh, it's a little screwy to say the least. But keep this in mind, BK is not a financial tool (that it was promoted as in the 90's which help lead to this new BK legislation).

You're claiming insolvency, this doesn't mean you can keep all the goodies and just make the creditors go away... please don't take that the wrong way, but it's the harsh truth of BK. A "clean slate" means just that for both sides...

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I want nothing, but house and 2 cars.

Wife just wants ring.

I will even leave the door open for them :roll:

But im worried that they could take my tools, I do need to work.

They get 3 items they can make money off of. Boat and 2 jet-skis.

Heck, I cant even fix the babies room or buy anything that he or she would need.

Also could someone explain how I should go about putting a value on things I have to be under $2000.

Should I lump together each room break it up like Rooms to go,my appliances are from late 70's early 80's. came with house, worthless.

Bedroom set is from thrift store, total price was $90.

Living room set was $1000 5 years ago.

Washer and dryer work when they like, and they are puke green, OLD. Gave the old lady I purchased the house from $50 for both.

Have my wifes computer, its her work computer do they want that, might make it hard to do her job.

My brother stays with us from time to time and has his own room with his belongings. Will they say yeah right, thats your stuff. (WHICH IT ISNT MINE)

I have a pool table I got at Sears 5 years ago, looks good, but built like sh%$.

My lawyer wants me to take pictures of my belongings, whats-up with that. Has anyone ever heard of that. He says it helps explain things easier when they start to ? something.

I have a dog that I have to list, priceless to me!! Whats he worth to them. They best not mess with his bed, at 160 pounds and mean they might have problems :lol:

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When you itemize your assets, it's better to be more thorough than vague. I'd be taking pictures left and right. You're looking to declare a value on these items under the allowable exemptions...

What about disaster relief? Homeowner's insurance (which I understand is a COMPLETE mess down there)?

I'm no BK pro, but I'd start thinking about getting a new attorney. Yours sounds like he's going to rubber-stamp this thing all the through without giving it any real effort - not explaining to you what's up with the tools you use to work throws a huge red flag in my head.

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Disaster relief, theirs something to laugh at.

FEMA is forcing thousands to pay them back :evil:

So more pictures is a good thing. What happens if my value goes over whats allowed. Do they just pick what they want to take? I know it will be over by a few hundred. Hell I owe over 65K. I bet they will take it just for fun :roll:

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I know FEMA is taking back the fraudulent claims....

You have the option of paying to keep certain things of value if it comes to that. The credit police won't come and grab your wife's ring or your tools. There are some options.

Your BK attorney should have answered all these questions for you - that's what you're paying him for.... :?

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Well its what they believe to be fraudulent claims, cant say they were all honest.

Alot of insurance companys pull coverage following hits like the ones we had. They wont renew coverage. FEMA is the abuser in thousands of cases in FLA. they are threading on thin ice. Many homeowners still have plastic tarps for a roof no money from insurance or FEMA to help and the money promised by FEMA has yet to be seen and already they are coming after them for repayment. The impacts of these storms are felt for years, and carry over to the next hurricane season. Heck this season is supposed to be worse.

I found the sight that talks about FLA exemptions.

It says "Tools of the trade - NONE"

What does that mean?

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Get yourself a copy of NOLO PRESS "How to file Chapter 7 Bankruptcy"...it has answers to lots of your questions, and will help you ask the appropriate questions for the next BK attorney you talk to. Recognize that the new BK laws may twist some of this a bit, but its a good resource to have.

When it comes to putting a value on your assets, you use "garage sale" pricing...even if you had new furniture that you paid $10,000 for 5 years ago, the chances of getting more than a couple hundred is slight.

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Ok, I've heard of a number of FL cases where the Trustees ARE sending out appriasers to look at personal property, and this seems be a growing trend. FL lets you keep an UNLIMITED amount of equity in your home, but only allows a paltry $1000/per person in personal property. My guess is they can't touch the equity in the house (well possibly some with the new law on homestead exemptions in effect now), so they will go after anything else.

If I were you I would make a detailed list of all of your stuff. Make a spreadsheet if you have the software. On that you put down each item, put down the year you acquired it, how much you paid for it, what its condition is now, and then the value you are using for it now. If you bought something used, make a note of that on the spreadsheet. Along with the photos, this kind of list should help.

Go to a Thrift store and look at the prices and those are somewhat bloated so that they can make some profit. 30 year old washer and dryer isn't gong get any Trustee much of anything and they know it. If they take stuff from people they sell it at auctions, big Trustee sales, so they are not going to get 'top dollar' much of anything.

Unfortunately, the Trustee's appraiser is going to put a value on EVERYTHING in your home, including your brother's stuff, so make sure that you have a separate list of HIS stuff and if you can get him to sign a statement that the stuff is his, that would be helpful.

I wouldn't worry about your dog. The paralegal listed my 2 cats -value - ZERO, do the same for your dog unless he's some kind of prized pedigree ;)

Your worry is your tools and who can blame you. Its not the Trustee's job to put you out of business or prevent you from making a living, that would be just plain stupid. FL does not have any specific exemption for 'tools of trade' which means they get lumped in under 'personal property'. If you can't redeem them, you may, indeed, be looking at a Ch 13 to keep them. You may want to look into a 722Redemption loan too, its an option.

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OK, Ive been going around the house, at this point I just dont care what they take.

Sorry but my brother had enough he's moving back with mom an dad. He stayed with me because it use to be less stress. He needs to concentrate on school and not this mess.

I think I will do the spread sheet like you said, should I make it room by room. I told the wife to stop cleaning up, maybe with less visual impact that somehow might help.

Another thing is alot and I do mean alot of my stuff is garage sale items that I fix up to look better, and I do a good job at that. The house was basically put together with family hand me downs, they are very much worthless even at a garage sale. If they allow to buy things back will I pay an arm or a leg?

My house isnt huge I could just squeeze in under the $2000 exemption, and thats giving everything a fair value. Even when I inflate the prices its under $3500 dont see how that would off set $75K in dept. If it does end up they want something how do they determine what they want to try and sell, and if they cant sell it will I just get it back. Im sure they dont threat things with respect when moving them. I should probably assume they will damage items.

I have talked to other lawyers and they seem to think Ill keep my things, and it will all be a piece of cake.

My wife has even been willing to part with the ring if need be, but Im sure my family would disown her for it

And let me tell you I used an expense cal. I found online, Im in the hole $400 to $500 at the end of the month. My wifes job requires her to dress professional. We seem to be buying clothes ever weekend to keep up with the baby growing. (BIG BELLY).

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Okay, look, you're doing a lot of stressing yourself here over a bunch of maybes...

First...the ring...if your family would be concerned if it were sold...is it an heirloom or something? What do you think it would sell for? As I said before, my suggestion would be to just not wear it for awhile...give it to someone for safe keeping, and just lump its value under "personal jewelry" ...

Second...LadyNRed is one of the more knowledgeable people on this site, but there are times when she forgets what site she's posting on. She's right...there is a possiblity that the trustee MIGHT send someone out to appraise...but, only you and a lawyer can guess how likely that might be. From what you've said, and what the other lawyers you talked to have said, I'm guessing it ain't gonna happen...

Third...realize that trustee's get paid a flat fee...like $60...to process your papers and then a percentage of what they can take from you and resell for money to give your unsecured creditors. Here in Ohio at least, it seems to be $20-30k in realized cash value that would get them excited. Florida may be different, but your lawyer should be able to tell you that.

Fourth...if you want a better feeling for what happens, go sit in on a couple of 341 meetings at your local courthouse. Get a look at what goes on...MOST BK7's are not contested, unless YOU the debtor walks in with gold chains and titles to BMW's...

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Ok, I've heard of a number of FL cases where the Trustees ARE sending out appriasers to look at personal property, and this seems be a growing trend.

Wonder if that has anything to do with the weather of last season.... you can keep the equity in a damaged home, but they want to see everything else if you declare BK now (people may be looking to BK now more than ever) in FLA ???

Or is this becoming a national trend with the rush to BK before the new legislation goes into effect?

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I don't think the hurricanes have anything much to do with it. If you have a 2 million dollar home, which (could be) 100% exempt, then you're not going to furnish it with garage sale furniture. $1000 personal property sucks, and with the FL BK districts being the busiest in the nation with the most cases filed, the Trustees are being more aggressive in looking at how people are valuing thier personal property. Hard to squeeze much into $1000, even at garage sale prices. They are being very aggressive in trying to recover SOME money in about the only place they can - personal property.

Now, if you don't own one of those million-dollar homes, the Trustee may very well leave you alone and NOT send appraisers out. The devil is in the details, that's why I suggested the spreadsheet with LOTS of detail to support the valuation you use in your schedules. Even though my state has a much more generous (not huge though) personal property exemption (which also must include my car) I had every single thing I own listed on a spreadsheet in the way I outlined above. The lawyer was impressed, he rarely ever sees detail like that. IF my assets were questioned, I could pull out this spreadsheet and show that my couch, which I valued at $25, was purchased in 1993 and it was only $800 when I bought it. Depreciate it for 12 years and add the cat scratch damage and the Trustee isn't going to get much more than $25 for it at any sale or auction. That is the kind of supporting documentation I would think to be very helpful in FL with these puny exemptions.

The DOJ issued some missives a couple of years ago telling Trustees that they were to be more aggressive in catching fraud and squeezing money out where they can find it (basically). So in that respect you could call it a 'national trend' but I think it still boils down to the numbers by district. Any way you slice it, some Trustee's are very aggressive, others are more middle of the road and a few are downright lax. There's one Trustee here in my area that was described to me as a 'tight-fisted CT Yankee' and is apparently very tough and very picky. The rest were described as 'moderate'. TN has a fairly high BK rate, as does FL, and I think that DOES impact how the Trustee's operate.

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The best thing in the house is a $500 pool table at best its worth $200 now, they can take it I need the room.

My 5 year old big screen T.V has been on the blink about ready to die, they can get that out of the way.

I closed my bank accounts because I think the CU might try to keep my money.

The rest of my things were made by me, or they are thrift store, garage sale items. They can take it if they want, Ive been trying to clean up anyway. It would cost them more to take my things. Like my wife said its all material!

LadyinRed Im taking your advice on the spreed sheet, just have to learn how to make one :lol: I know very well that I will go over in exemptions by a few thousand, but thats the chance I will have to take. I hope that by being completly honest I wont be hurt to bad.

Like they say your trying for a new start, they are material items only. I need a new beginning! :roll:

At least I keep the roof over my head, till the next hurricane's pass. :cool:

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Draconian, spreadsheets aren't all that hard to do once you get started, its rows and columns. Make columns for the item description, and then columns for current value, purchase date, and cost, and another column for notes like 'bought used at flea market' or 'water damaged' etc. Each item is a row.

You can lump stuff like kitchen utensils and small appliances (blender, toaster, etc.), itemize larger items. Same goes for clothing, you don't have to itemize every pair of socks, just a one-liner for 'clothing'.

If you don't have Microsoft Office or Microsoft Works, I highly recommend OpenOffice, its VERY good software, has everything that Microsoft Excel has (and more! ) and, the best thing about it is ITS FREE !!!

You can get it here: http://www.openoffice.org/

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