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Met with BK lawyer today, He says go ch 7.


bird4fsu
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Sound like legit info?

 

Judgement on $200,000 forclosed home in 2007.

20k in credit card debt, mostly falling off after the 5 years.

20k repo car judgement in 2010.

 

She makes 50k a year.

No house

No car (Company car used)

No valuables

 

Since she met me, (2 years) she has 8k in 401k, 5k in the bank, 8k in savings.

 

Lawyer says what I did hurts her. Says 500$ fee to him to do work + 300$ or so to file + some classes.

 

Also says the court will go after her cash!!!

 

Sound right?  What should she do?

 

Thanks

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Yes, the BK court will take her cash.  And, making $50K per year, I would be surprised if she wouldn't be forced into a Chapter 13.

 

Check your state's BK exemptions as to what she can keep.  Maybe use the non-exempt cash to gain exempt assets, like a car (depending on state law, again).

 

Is there a compelling reason to file BK?   If she has money in the bank the judgment creditors haven't found, why do the BK?  (And, with judgments, having large bank accounts is not a good idea.)

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Depends on what the Florida BK Exemptions are. If there are any wild card categories, then the cash is safe. If not, then it will need to be turned over to the state anyways.

For all intents and purposes, she is bankrupt anyways. The credit cards and repo are not a big deal but the foreclosure judgement can last a long time (possibly decades). This woman needs her life back. I do not take declaring BK lightly but in this case, there are no easy options left that do not include a BK. The first thing she should do is talk to a couple of attorneys and let them determine her situation. She needs to shop because some BK attorneys are paper pushers who only want to do the BK the easiest way possible and others really do what is best for the client. She might also want to take the required pre-BK credit counseling class ASAP to get that out of the way. In either case, she has a couple of options:

1) Chapter 13 for 3 - 5 years. Most likely this will pay off the credit cards and car repo leaving the foreclosure out of luck at the end

2) Chapter 7 where she reliquishes the remaining cash to the creditors who get to divide it amongst themselves and that is it

3) Come up with a settlement for the credit cards and car loan, wait the 90 days for the privilage payments to expire, and then do a BK 7 solely on the Foreclosure leaving them out of luck

Her only other option is to use the cash to settle with the credit cards and repo and then save up as quickly as possible to settle the foreclosure debt but I doubt that will work.

I do think the credit cards and repo will settle for 25 cents on the dollar. All she has to tell them is that she will do a BK and that there, they will only get 8 cents on the dollar due to the foreclosure judgement. Better to take her offer than to get less. There will probably be no tax liability because she can show insolvency.

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How much is the balance due on the mortgage and car loans?

 

Does she actually owe 200K and 20K or just the balance after the assets were sold?

 

Not sure about the laws in FL., but in my state they would take almost all of that 21K. Another thing to consider is the last payments on the credit cards. I probably wouldn't file BK because of them. They may not even still be owned by the OCs any longer. If they are owned by JDBs then she can fight them if sued. The real decision to file or not should be made around the foreclosure in my opinion.

 

BK is not something to be taken lightly. It will stay on her CBs for ten years and her permanent record forever. This can be a problem getting a job in the future. The positive side about BK is getting it over with quickly assuming everything is approved. The price for the BK is cheaper than most. Any money paid to the attorney should be paid out of her checking/saving accounts. The money paid to the attorney will be exempt and you want as little as possible in those accounts when she files.

 

Keep in mind she will have to account for every dime that comes out of those before and during the BK process. The BK Trustee will get a percentage of all money recovered, so they will be motivated to take as much as legally possible. Be careful about getting any of your money involved with hers because it could be targeted. 

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Sound like legit info?

 

Judgement on $200,000 forclosed home in 2007.

20k in credit card debt, mostly falling off after the 5 years.

20k repo car judgement in 2010.

 

She makes 50k a year.

No house

No car (Company car used)

No valuables

 

Since she met me, (2 years) she has 8k in 401k, 5k in the bank, 8k in savings.

 

Lawyer says what I did hurts her. Says 500$ fee to him to do work + 300$ or so to file + some classes.

 

Also says the court will go after her cash!!!

 

Sound right?  What should she do?

 

Thanks

Who is filing bk-you or your wife?

What did you do that hurt her?

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Girlfriend.. Was a mortgage broker at the height. Lost job, then house then car. Years ago.

 

Now we are getting calls. Already paid off 2 places after they ordered her to appear in court.

 

 

 

If the Car's remaining debt was sold to collection agency, can they use the original judgment and sue or garnish wages?

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Well, there's nothing wrong with accumulating assets.

I'd sugest she visit with a few more lawyers and really get familiar with Fl.'s exemptions.

Right off the bat, her 401K is exempt plus, up to $4K in cash. Also, contributions to a MSA acconts are exempt.

Were I her, I'd maximize what I could exempt. Ask a lawyer about opening an IRA for ex. Then just spend excess cash down. Things like, legal fees, any dental work or medical procedures she may have put off for her or any kids.

Again, speak with another couple of bk lawyers and get some answers to what she may be able to exempt.

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In addition, it has to be worthwhile for a bk trustee to mark a case as "asset".   Trustees receive compensation pursuant to 11 U.S.C. 326.  If there is only a few thousand in non-exempt equity, no trustee in my district even dreams of opening an asset case (ie you stay as a no asset and discharge with no handing over of assets).  It takes about a year to get through an asset case.  Motions, reports to the court, a final tax return by the estate, etc.  A real pain for the trustee...so if not worth their time, no issues.   So don't sweat it.

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Sound like legit info?

 

Judgement on $200,000 forclosed home in 2007.

 

Most judgments are five years (in Okla) unless they renew them through the court (is it renewed?) Is there a lien attached to any property?

 

20k in credit card debt, mostly falling off after the 5 years.

20k repo car judgement in 2010.

 

She makes 50k a year.

No house

No car (Company car used)

No valuables

 

Since she met me, (2 years) she has 8k in 401k, 5k in the bank, 8k in savings.

 

BK can't touch the 401k, "you take the  5K for services rendered   :roll:  bury it in the back yard ", then take a "cruise" on the 8K

 

Lawyer says what I did hurts her. Says 500$ fee to him to do work + 300$ or so to file + some classes.

 

Bet that $500 is just to start...look for more to be billed. None of the lawyers are doing anything for less than $1200 anymore.

 

Also says the court will go after her cash!!!

 

What cash? Spent it all for "living expenses"

 

Sound right?  What should she do?

 

Might be a good idea for her to work a little less for a period of time to lower her gross a little and accumulate any savings in Mason jars in the back yard.

 

If she feels BK is absolutely necessary, Go for Chapter 7 if possible as either 7 or 13 will ruin any remaining credit if she has any and  13 is another mill stone on her neck..................although a 13 can be converted to a 7 at a later date if needed (more lawyer fees and court cost)

 

Thanks

 

 

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  • 2 weeks later...

Judgments usually last 20 years, the 5 year renewal requirement has to do with priority of lien. 

 

My advice- there are very little assets involved here.  This attorney sounds like he/she is very conservative.  Relax, and find a more aggressive attorney.  This case is an EASY no asset Chap 7 case in my area. 

 

 

 

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  • 5 months later...

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