Jump to content

Filing for BK, few issues...


Wombat
 Share

Recommended Posts

Some of you may know me from the Collections boards, my husband and I made the decision over the weekend that we just cannot keep 'getting by', the collection calls are constant, with one company filing suit. We've decided to file for BK.

Couple of issues;

We are trying to sell his car right now because we can't afford to keep paying for it, its current, and out of some miracle we're not upside down on it. Is this going to look bad on Chapter 7? And what of the proceeds? We REALLY need them to keep things together, we're looking at maybe 7k max.

Second issue is our tax return, we have 4 kids, and his income this year will be less than 36k we're looking at EIC etc but thats about it, will they seize this? We've only managed to stay afloat this long living off of last years tax return.

We definately meet the income requirements in WA State for the means test for Chapter 7, there is really nothing left to liquidate, just wondering if there is any way we can stop these funds being absorbed by our debts?

Link to comment
Share on other sites

Your EIC should not be an issue...as far as the car goes, once it is sold, the proceeds would become part of the BK estate - meaning that the trustee would decide who gets any $$ from it...

I'm reading just about everything I can right now, about exemptions and whatnot, is there anyway we could include this in a Wild Card exemption, I'm still not exactly clear on what it is, but still reading...

Link to comment
Share on other sites

A wild card exemption is an amount you can apply to something that's not covered. The laws for your state will give a specific amount and how it can be applied. In my state, we would be able to apply it to a vehicle.

I would suggest you contact a reputable BK attorney immediately, and set an appointment for a free consultation. To prepare for the consultation, read the following link, especially the post by LadynRed.

http://www.creditinfocenter.com/forums/bankruptcy-q/278066-bankruptcy-keeping-costs-down.html

Link to comment
Share on other sites

Yep, contacted an attorney, he essentially said 'yes' we qualify for Chapter 7 but any other questions I had would require me paying his $600 initial retainer, of $1800 total... the reputable part comes into question, guess I keep looking online...

Link to comment
Share on other sites

I have been trying to decide if I should file for BK in WA also and have been doing some reading.

I could be wrong but I believe that you can't have more than $100 in cash when you file. If you sell the car and have $7,000 the trustee will take all but $100 and use it pay off the debtors.

I'm not positive on this but you might be able spend the money on something you will be able to keep. If you need dental care it seems like you could use the money for that, or home repairs, car repairs or new tires on the car you are going to keep.

Link to comment
Share on other sites

I have been trying to decide if I should file for BK in WA also and have been doing some reading.

I could be wrong but I believe that you can't have more than $100 in cash when you file. If you sell the car and have $7,000 the trustee will take all but $100 and use it pay off the debtors.

I'm not positive on this but you might be able spend the money on something you will be able to keep. If you need dental care it seems like you could use the money for that, or home repairs, car repairs or new tires on the car you are going to keep.

I read this also about the $100, seems ridiculous.

I read SO much yesterday about the Wildcard exemptions being able to be combined if say we're low on the one car its worth maybe $3000 if we're lucky we can use the remaining $2000 from that plus the $2000 from the Wild card exemption, but that still doesn't cover the $7000.

I looked at reaffirmation of the debt, so basically renegotiating with the auto loan finance company to pay it after discharge, but my understanding is that they don't have to renegotiate with you, that its at their discretion and they can option to repo the car at that point, and we lose the equity, or they can refuse and they trustee takes it. Further the 'judge' that oversee's the BK can determine that you don't have the means to keep repaying that debt and order it to be sold. There was something there about a petitioner that is unrepresented not being able to be declined by the judge but either way we don't have the money to repay it, it would only be long enough to sell it, and I'm not sure how this works, because we would sell it ASAP and that looks kinda shady I think and I'm certain there's something in the law about them taking those funds too.

Also took a long hard look at the 'lookback' period, if we were to sell it now, before filing got BK the trustee could make us pay repay that $7000 toward debts equally. Seems crazy since my parents have been paying the car payment till we could sell it and we owe them that money. Not all but at least half, but we don't get to choose which debt the money be paid to, that that is the 'trustee's job'. It looks like asset wise our tax return would be protected so thats something.

I'm just not sure how you're supposed to be better off, they leave you with $100, no house, one car thats on its last legs. Sure you have no debt but you have nowhere to live and no way to even pay the deposit on something? We haven't recieved notice of Auction yet on the house but it could come any day, then we have till they sell, and a month to get out, but I also read if you file for BK that it is on record and very few large property management companies, or essentially apartments will rent to you as it is disclosed to them, and you're labelled a dead beat tenant. I would think it only fair that part of that 7k be used (which we were intending it for) to secure a downpayment on an apartment at the very least but it doesn't really look that the BK law in WA State is written that way.

It just doesn't look like we're any better off. I'm thinking we sell everything, and move home to Australia, and start over with the help of my family.

Link to comment
Share on other sites

I have been trying to understand all of the info myself and still have a long way to go.

My one thought, and I don't know if this would work, is to sell the car now. Take the $7K and use it pay the lawyer and then rent the appartment now before the forclosure and BK show up on your credit check.

Yeah I thought about that too, but the 'lookback' process would probably require us to repay the 7k toward debts, and after its been spent there's no way we could come up with it. One thing we could do is wait for the tax return and pay the deposit somewhere then as its sheltered, and then file for BK. Still doesn't resolve the car issue. Problem with that is judgement on the pending legal action/garnishment will have started by then as S&H are aggressive and I can't see them waiting around till January. Plus any other CA that gets their act together between now and then.

Link to comment
Share on other sites

Not to sound rude, but there are other lawyers out there that will give you free advice and not just the bare minimum. Why don't you stop speculating and worrying yourself and actually get solid legal advice.

I thought about it many, many, years ago and went to three different totally free lawyers. They all about said the same and fully answered all my questions. I had zero doubt once I was done with my free meetings.

Just because one lawyer only gives you a little advice does not mean they all will be the same. The competetion is ungodly. It's not like there is a shortage of lawyers out there. While complex to you, as it should be, I have a feeling your situation is not even remotly complex for a BK atty. It sounds pretty cut and dry to me. Stop worrying and just get solid legal advice. You can find every opinion in the world to support your position if you just stick to the internet.

Link to comment
Share on other sites

You could sell the vehicle if you wanted to. So long as you can account for where the cash was spent there would be no liability beyond discharge. The vehicle is the equivalent of cash. If you paid the lawyer with cash and then bought an old vehicle worth less than your vehicle + wildcard exemption amount, you'd be fine.

If you are expecting a large tax return, then you need to increase your withholding deductions to counteract this.

Link to comment
Share on other sites

You could sell the vehicle if you wanted to. So long as you can account for where the cash was spent there would be no liability beyond discharge. The vehicle is the equivalent of cash. If you paid the lawyer with cash and then bought an old vehicle worth less than your vehicle + wildcard exemption amount, you'd be fine.

If you are expecting a large tax return, then you need to increase your withholding deductions to counteract this.

Thank you for the advice on the vehicle.

Just the EIC on the tax and nothing more, we maxed the deductions to increase income a while ago.

I have a couple more appointments with lawyers to see if I can get some consistent answers.

Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
 Share

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.