How do I make sure everything is covered in the BK?

[sc1776]

So unfortunately I may be facing a BK.  I am def exploring other options to clear up the debt but I have a sneaking suspicion that one particular creditor will not be flexible in the least.  Its a debt from an investment opportunity gone way wrong.  What I'm trying to figure out is how do you make sure everything is properly covered in your declaration?  How do you make sure you haven't missed anyone / anything / any debt?  For good or for bad I checked out for a period of time (probably made the matter worse) but now I'm trying to assess the damage and get my life back on track.  I'm just not sure who all is owed what...Thanks in advance for your replies....

[willingtocope]

Technically, when you declare BK 7...EVERYTHING is included, whether you list it on your schedules (except government student loans and taxes).  In order for your obligation to repay something, the bankruptcy court must agree that it "passes thru".

 

However, if you do miss something major, you may have to amend your paperwork later.

[bingo]

Pull your credit reports, look at old dunning letters, old bank statements and your check register.

Schedule anyone who may conceivably have a claim.

And, if you are a no asset bk and forget to list a creditor, courts have ruled the debt is considered discharged because, the creditor wasn't harmed by not being notfied because, they'd have received no dividend anyway.

[WhoCares1000]

The issue hinges on whether this will be a no asset case or asset case. If the case is no-asset, then all debts are considered discharged regardless of whether they are listed or not because of the no harm, no foul legal opinion. The creditor was not harmed by not being scheduled and therefore it did not matter.

If the case is an asset case, then you want to list every conceivable creditor you can find. Look through credit reports, court records in any place you might have a debt, old bank records, etc. Make sure to list everything you can fine, even the $20 gas bill from 3 years ago.

Also, the list of debts are not dischargable is longer than simply taxes or student loans. I just bet that they do not apply to you (or most people).

[jq26]

Always list, list, list, serve, serve, serve.   No harm in listing creditors that may not be creditors, but if the creditor does not know of your case and can make an argument that they had grounds to seek non-dischargeability, then the debt may not be discharged.  You need to do your due diligence.   Every case always faces a bit of this quandary, particularly when it comes to medical debt.  One trip to the hospital can leave you with a dozen separate creditors, some of which don't come out of the woodwork until post-petition.

 

Do the best you can, that's all.   

[sc1776]

Pull your credit reports, look at old dunning letters, old bank statements and your check register.

Schedule anyone who may conceivably have a claim.

And, if you are a no asset bk and forget to list a creditor, courts have ruled the debt is considered discharged because, the creditor wasn't harmed by not being notfied because, they'd have received no dividend anyway.

 

I'd love to pull my CR I'm just still trying to figure out if by pulling my CR it puts me back on the radar...I've managed to lay low for a while now and I'd like to continue to do that until I have my best plan in place...

 

Technically, when you declare BK 7...EVERYTHING is included, whether you list it on your schedules (except government student loans and taxes).  In order for your obligation to repay something, the bankruptcy court must agree that it "passes thru".

 

However, if you do miss something major, you may have to amend your paperwork later.

 

So just to be clear you are saying in a Chapter 7 whether you list it or not its automatically included?  

 

Thank you all for your input and advice  much appreciated!

[willingtocope]

Yes...in a BK 7...everything is included unless the trustee says otherwise.  But...do not intentionally try to hide either debts or assets.  The trustee may take a dim view. 

[WhoCares1000]

I think pulls by yourself are considered soft pulls and creditors do not see those. They would only see actions such as other creditors looking at the report or new creditors trying to give you a loan which would trigger things.

As for the automatic inclusion, it depends on what type of case it is. You are best to try to find every creditor possible and listing them, even if they really are not a creditor. This is because if your case does end up being an asset case, a creditor not listed could say they were harmed. The system does know however with all the sales and methods used, this can be very hard and makes allowances but the judges do want to see best effort.

[numbersguy]

Try to list every person/firm/entity that you may owe or did owe money. Even if you paid off a particular creditors a few years ago and you list them in the filing, no big deal.

 

Each case is subject to the rules of the particular jurisdiction as to whether debts not listed are discharged. I believe that even in a no asset case in the First Circuit, if a debt isn't listed, it isn't necessarily discharged.

[corawhite07]

So unfortunately I may be facing a BK.  I am def exploring other options to clear up the debt but I have a sneaking suspicion that one particular creditor will not be flexible in the least.  Its a debt from an investment opportunity gone way wrong.  What I'm trying to figure out is how do you make sure everything is properly covered in your declaration?  How do you make sure you haven't missed anyone / anything / any debt?  For good or for bad I checked out for a period of time (probably made the matter worse) but now I'm trying to assess the damage and get my life back on track.  I'm just not sure who all is owed what...Thanks in advance for your replies....

 

If you are filing for bankruptcy, All of your debt will be covered. In your situation, try to talk to your lawyer what will be the steps to figure out that one of your creditor is covered if you are filing for bankruptcy.

[sc1776]

Here's a mini update and I'd love more feed back.  To be clear...I DO NO believe I have any assets.  I say "believe" because all of the rental properties that I had in my name I assigned to my business partner.  Not in any way shape or form to try to hide them but because I wanted out of real estate and he wanted to try to hang on to them until the market turned around.  This assignment was done over a 1 year ago and may have been as many as 3 years ago.  The mortgages may still be in my name as the agreement was really more of a Power of Attorney to give him control but I'm not sure he actually took title.  If they are considered "assets" then I have no problem letting them go.  I have not had a bank account for almost 3 years and I do NOT and have NOT had a job since 2010-ish.  I've honestly been too afraid to work.  I've just been living with friends and family. I have had NO INCOME.  Bankruptcy is just seeming to make more and more sense.  I really want to start my life over and BK is the only way I can see clear to do that...I'm trying to establish residency in a non income garnishing state in order to give myself extra breathing room, but BK just seems to be the light at the end of the tunnel.  The debt is just WAY more than I could ever figure out how to pay back...All of this stuff seems so complicated and I really don't know where to start, but I'm tired of sleepless nights and the huge burden on my shoulders...I could really use yall's help / feedback...Thanks!  

[despritfreya]

I have a sneaking suspicion that one particular creditor will not be flexible in the least. It’s a debt from an investment opportunity gone way wrong.

 

 

 

Please make sure you have a very good attny because, if this investor is out for blood. . .

 

1) filing bk will be the worst thing you do because the investor will tell the Trustee all the dirt, especially if he has any inside knowledge about your personal affairs.

 

2) he may file a Complaint against you under 11 USC 523(a)(2), (a)(4) and (a)(6) and you will have to defend and win (or settle).  If you do not win (or settle) any debt you owe to him may be non-dischargeable.

 

 

To be clear...I DO NO believe I have any assets

 

 

 

What you “believe” is not relevant.  It is what the Trustee believes.

 

 

all of the rental properties that I had in my name I assigned to my business partner.

 

 

 

And here is your problem.  1) EVERY transfer of EVERY kind that has happened in the 2 years before filing MUST BE disclosed on Question 10 of the Statement of Financial Affairs.  2) You better have all of the details of each transfer including all transfer documents.  3) You need to be prepared for a Trustee's investigation of these transfers and you better warn your business partner that the Trustee will drag him into a deposition in an effort to determine if the transfers should be set aside.

 

Warning. . .  Even if the transfers were more than 2 years ago and, therefore, do not need to be listed in Question 10, the Trustee can and will go back at least 4 years and you can bet that the investor is going to tell him about the transfers, assuming the investor knows about them.

 

 

The mortgages may still be in my name as the agreement was really more of a Power of Attorney to give him control but I'm not sure he actually took title.

 

 

 

You better get an clear understanding of what you did or did not do before you file bk.  If the properties are still in your name, each is listed on Schedule A and each lender on Schedule D.  If the properties are not in your name but the loans are, each lender is listed on Schedule F. 

 

 

Bankruptcy is just seeming to make more and more sense.

 

 

 

Based upon this last post, maybe not.  You NEED AN ATTNY!!!!!  If you do this on your own you will screw it up and you will be sorry.  Get to an attny today.

 

Des.

[sc1776]

Des-

 

I appreciate the feedback but the investment opportunity was a bank loan for a property.  There is no "dirt" for the investor to tell the Trustee.  There was nothing nefarious that went on.   There's not "inside information about my affairs" to be hiding.  I didn't run a Ponzi scheme for goodness sake lol.  When I said I don't believe I have any assets what I meant was that there are a couple of rental properties where I may still be on the mortgage.  But CERTAINLY those properties have NO equity and are upside down b/c of the market.  And as far as the transfer goes, I honestly don't care if those properties get listed and dumped b/c of the BK.  As far as I'm concerned they can go, I'd rather they do so they don't come back to haunt me later.  

[bingo]

Good lord! WHat is this too afraid to work nonsense?

First thing I'd suggest is getting a job and have the ability to support yourself post bk as well as money to pay a lawyer.What good is a bk filing if you still can't support yourself? You can't expect others to take care of you forever.

[sc1776]

Well what's the point of filing a BK if it doesn't wipe away the deficiency judgement for the real estate investment(s)??  How do I support myself if a creditor can take it all away?  Believe me I don't expect nor do I want others to take care of me, that's a BIG part of the problem, that's why I'm here on this forum.  I'm trying to figure out how to fix my situation.   Just in a really bad place right now and I'm trying to figure out how to make it right...

[willingtocope]

Given the situation you describe...get a lawyer. Deficiency judgments WILL be discharged in a BK 7, but you are going to need help sorting out what you own.

[Wins the Battle]

a.) If you have no assets, and have not worked in the past four years, how have you been living?

 

b.) 0 If you are planning to declare a relatively complicated bankruptcy, why, instead of getting advice from an attorney, are you giving the members of a credit forum, drip by drip, the pieces of your situation? This isn't like fighting a JDB in court. The more complex your situation, the more likely that the trustee will be watching and pouncing on ways to get money for the creditors, and make your life miserable with interrogations about your financial dealings. 

 

c.) If you believe that your financial situation warrants bankruptcy, why does it make a whit of difference whether or not you pull your own credit reports? (Get paper copies from all CRAs) Even if one or more of them should decide to waste the money suing you for the debt, a bankruptcy before the suit is complete stops the suit. And, even if there is a judgment against you, the bankruptcy dissolves that, too.

 

You need to talk to an attorney. And, as suggested, if you are employable, then start figuring out how to pay for the bankruptcy attorney so you don't make crucial mistakes (read threads here in the bankruptcy forum to learn about some of them) and end up worse off than you are now.

 

A good bankruptcy attorney will gladly take your case from the start. Very few are willing to come in after a messed up pro se one, and help clean up the pieces.

[sc1776]

TBH I had never planned on going this alone.  I'm just here to try to learn more about the situation so I can understand what an attorney is doing or going to do...I'm not trying to drip information on anyone in a credit forum but from what I can see there are a LOT of highly intelligent experienced people here who know a lot more about a lot of topics other than credit repair  

 

So if I am understanding you correctly, yall are saying that a BK Chp 7 should wipe out a deficiency summary judgement on a RE transaction gone bad?  As crazy as this sounds that would be music to my ears!!  

 

I'm not sure what the trustee would pounce on as I have nothing I'd be trying to hold on to and nothing to take...

 

The reason that it makes a whit of difference is that I don't feel like having creditors start coming out of the woodwork calling and harassing me 1000x a day.  

 

Like I said I don't have any intention of trying to do this solo...that was never my intention.  That fact was made even more clear after spending the little time here on this forum that I have spent.   I will def figure out how to pay for an attorney to handle this mess.  I was just trying to wrap my brain a bit around the situation.  

 

I am grateful for all the input and take none of it for granted.   This is hands down the scariest situation I have ever been in and I'm just trying to figure out how to navigate through it...

[willingtocope]

A BK 7 will wipe out YOUR personal responsibility for all debts (except federal student loans and taxes).

[Wins the Battle]

It should. But you are better off filing before the judgment. Another area where, not being a BK attorney nor an expert on RE law, I would suggest you talk to an attorney.

[sc1776]

Yes I am learning that filing before the judgement would have been wiser but that was NOT my understanding at the time.  I was always under the impression that worst case scenario would be to file a BK.  As like many on here I'm sure that given the info learned and wisdom from hind sight, would have handled things very differently...

[despritfreya]

. . . the investment opportunity was a bank loan for a property.  There is no "dirt" for the investor to tell the Trustee. When I said I don't believe I have any assets what I meant was that there are a couple of rental properties where I may still be on the mortgage.  But CERTAINLY those properties have NO equity. . .  And as far as the transfer goes, I honestly don't care if those properties get listed and dumped. . .

  

 

And this is why I said you need a good attny.  Even if the bank was just a lender and not an investor, the rental (investment) property is an issue. 

 

1.  You say you do not care about the transfer.  Assuming your gave away the rights to the ownership of the property to your partner for $0.00, I need you to realize that, if your partner collected rents and utilized those amounts for anything but payment to the mortgage lien holders, the Trustee can and probably will seek recovery of the equivalent sum from him.

 

2. You do not indicate if those properties are currently occupied by paying tenants.  If they are, and if the properties belong to the bk estate either because they are still titled to you or the Trustee can recover the properties by avoiding the transfer, rents collected post petition must be held for the Trustee.  They cannot be used to pay anything.

 

You indicate that you have no intention to proceed without the assistance of counsel but that you simply cannot afford one at the moment.  Most bk attnys do not charge for the initial consultation.  You may not have enough $$ right now to hire an attny but you should begin by setting up consultations with several so that you know what to do between now and when you do have enough $$ to hire one.

 

Des.

[sc1776]

Des-

 

You are 100% correct...the bank was lending for the property and the dev of the property..now when you say:

 

"if your partner collected rents and utilized those amounts for anything but payment to the mortgage lien holders, the Trustee can and probably will seek recovery of the equivalent sum from him."   And I mean this politely, I'm not trying to sound rude or flippant, because perhaps I wasn't clear...those other "properties" were not owned by the bank that holds the judgement.  Also, how could the Trustee have any expectations of rents collected BEFORE a BK was initiated...I haven't filed any BK paperwork so are you saying he can look back before the BK and look to take back rents from other properties?  I honestly have no idea what he's done with the money.  

 

 

I am working on finding an attorney.  I had learned that many of the BK attorneys offer a free initial consultation.  So my plan was to contact several, find out what my options are and then plan and prep... 

[despritfreya]

I do not take offense at your comments.  You are trying to get information and the only way that happens is if you ask the right questions.

 

those other "properties" were not owned by the bank that holds the judgement.

 

 

 

Understood and not a problem.

 

 

Also, how could the Trustee have any expectations of rents collected BEFORE a BK was initiated. I haven't filed any BK paperwork so are you saying he can look back before the BK and look to take back rents from other properties?

 

 

 

This is where your problems may come in.  You “gave away” an income producing asset and got nothing of value in return.  The recipient of the “gift” then (presumably) continued to collect rents and used those funds for his own benefit instead of the benefit of your creditors (all of them).  If he used the funds to pay any mortgages on the property, property taxes and general up keep (and can prove it) maybe there is no problem.  But, if he pocketed the rents the Trustee can seek their return.  Google “fraudulent conveyance” or “fraudulent transfer” and maybe even “recovery of proceeds or profits from a fraudulent conveyance”.  And, when I use the quoted term I am not talking about “fraud” in the normal sense.  “Fraud”, in this context is simply an “unequal exchange of value”.  See 11 USC 548

 

It is this issue, what happened to these properties and who was collecting and utilizing the rents, that is of great concern and should thoroughly be explored by you and competent counsel before you file bk if bk ends up being your choice.  If you are not understanding this issue and/or are not sure how to articulate it to the attny, print off these responses and show him/her.  He/she will understand the potential issue(s) I see.

 

 

Des.

[sc1776]

Des-

 

You are very kind.  And I understand what you are saying.  The properties were not transferred to avoid anything.  It wasn't a "gift" he was my partner, we made the "transfer" verbally back in 2008-ish when I moved away.  We just put it on paper for his peace of mind a year or so ago.  I honestly have no idea what happened to the money from the property(s).  In the couple of conversations we've had I know he's stated that he had upkeep on them but I'm not sure all of what happened with it.  I think he's always been on the deed for the property just not on the mortgages.  

 

I did have my first conversation with an attorney this evening.  I plan on interviewing 3-6 of them to get some different opinions and or courses of action.  

 

To be honest I'm not sure that I have any choice but to file a BK...I have to get my life back on track...I can't have all this hanging over my head for the next 20years....

 

What this attorney did say was that he believed I would qualify for a Chp 7...that the properties would be classified as "business" so I wouldn't have to pass a means test.  

 

Also here's a new twist...I didn't mention it before b/c I didn't think it was relevant...I live in common law state.  My "partner" though we never filed a marriage license I guess are considered married...While I worked very hard to insulate my partner by never putting my name on accounts or what not, the attorney is saying that any money that my partner earned could be considered "community property"...any thoughts on that?