Chapter 7 income question

[chicamarie]

Hi there.  I am still reeling from a loss to U-fund/C-bank earlier this month, and am now doing what I had planned to do if I lost, declare BK.  I had a lawyer at the very end and he and I had talked about the possibility.  He has dealt with the Plaintiff's law firm many times and is convinced that they came at him extra hard during trial just because of their history, and he encouraged me to BK them rather than give them a penny, which of course I agreed with.

 

So, I only have that 12k judgment and one other card (C-bank of course!) with about 5k on it, to discharge.  I am married and filing solo.  We barely pass the means test but a 12k judgment would have killed me/us, so I feel ok about it.

 

We filed the petition yesterday so this is all pretty fresh!

 

I had some cash from an inheritance in 2012 that I locked up in a cashier's check when I first got sued, and I told the lawyer about it and we dispersed it to my IRA, and paid our Federal taxes.  My husband is self-employed and we always have to pay.  So, cash is pretty low, I was honest about it all, and I dealt with it in the "pre-bk-approved way", I think.

 

My question is, I was trying to be honest with the lawyer and told him about everything, as far as income, and I told him I sell things on Ebay from time to time.  Most of the time I sell 1000-1500k a year, max.  Nothing earth-shattering, and it's all stuff I get from family members that they don't want, or the occasional garage-sale score.  He indicated this on the paperwork.  But, at the end of last year I sold two things for about $700 total after fees, which bumped my Ebay income for the last six months up around the 1400 mark.  I have a Paypal acount and don't transfer $ over to my bank account, and I just use the money to buy household stuff on Ebay, or on Christmas, like I did this year, with the Paypal debit card that just takes $ out of the account.  I had to buy a new fridge too, with that money, so it's not like I'm buying fancy things with it. I don't carry any kind of a balance in there.

 

Is this something that will catch the trustee's eye?  It's not huge money, but since my debts to discharge aren't huge are they going to look at this even more carefully?  I have a big mortgage and student loan debt and two little kids, so my expenses are high and I look ok on paper.  I'm just nervous about having to talk to the trustee.

 

Thanks!

[willingtocope]

You should be okay.  A fridge is a necessity.  You might ask your lawyer...he should know how the local trustees act.

[bingo]

Oregon has some pretty nice exemptions for cash and personal propery. You should have smooth sailing.

http://www.thebankruptcysite.org/exemptions/oregon.html

[shellieh98]

If you are on the border of the means test, they may look a little more closely.  I was over the means test by 75.00, and my BK was dismissed. (that dam one overtime shift did it to me) If there is a good gap, they won't bother.

[chicamarie]

Ouch, @shellieh98.  That would be my concern. I'm prepared for the worst but I also know I can probably slide into a Chapter 13 if I have to, although I would rather not!

[corawhite07]

Hi there.  I am still reeling from a loss to U-fund/C-bank earlier this month, and am now doing what I had planned to do if I lost, declare BK.  I had a lawyer at the very end and he and I had talked about the possibility.  He has dealt with the Plaintiff's law firm many times and is convinced that they came at him extra hard during trial just because of their history, and he encouraged me to BK them rather than give them a penny, which of course I agreed with.

 

So, I only have that 12k judgment and one other card (C-bank of course!) with about 5k on it, to discharge.  I am married and filing solo.  We barely pass the means test but a 12k judgment would have killed me/us, so I feel ok about it.

 

We filed the petition yesterday so this is all pretty fresh!

 

I had some cash from an inheritance in 2012 that I locked up in a cashier's check when I first got sued, and I told the lawyer about it and we dispersed it to my IRA, and paid our Federal taxes.  My husband is self-employed and we always have to pay.  So, cash is pretty low, I was honest about it all, and I dealt with it in the "pre-bk-approved way", I think.

 

My question is, I was trying to be honest with the lawyer and told him about everything, as far as income, and I told him I sell things on Ebay from time to time.  Most of the time I sell 1000-1500k a year, max.  Nothing earth-shattering, and it's all stuff I get from family members that they don't want, or the occasional garage-sale score.  He indicated this on the paperwork.  But, at the end of last year I sold two things for about $700 total after fees, which bumped my Ebay income for the last six months up around the 1400 mark.  I have a Paypal acount and don't transfer $ over to my bank account, and I just use the money to buy household stuff on Ebay, or on Christmas, like I did this year, with the Paypal debit card that just takes $ out of the account.  I had to buy a new fridge too, with that money, so it's not like I'm buying fancy things with it. I don't carry any kind of a balance in there.

 

Is this something that will catch the trustee's eye?  It's not huge money, but since my debts to discharge aren't huge are they going to look at this even more carefully?  I have a big mortgage and student loan debt and two little kids, so my expenses are high and I look ok on paper.  I'm just nervous about having to talk to the trustee.

 

Thanks!

That would be ok. Your lawyer will handle the other things. And make sure to pay your extra credit and debt.

[chicamarie]

So now that it's been 3 months since I filed, and I've had my meeting with creditors and the trustee, there's a new problem.  It came up at the meeting, with the trustee, but he's just now acting on it.

 

Before I filed, I had some money I had been hanging onto in case of emergencies, that I had inherited in 2012.  I was pretty afraid to be completely cash poor, like we were when my husband lost his job, we lived off our credit cards, ended up in this mess, etc.  But, of course I had to get rid of it so I did it in the approved ways - I made an IRA contribution and I paid our 2013 taxes.  My husband is now self-employed but taxes are a bitch, and we have ended up in payment plans with the IRS, or paid late, or at least got an extension and filed and paid in October (with penalties of course).  My husband is a sole propietor and we just file jointly every year - his money is my money and vice versa. 

 

So, the trustee latches on to this tax payment and says I might have an "injured spouse" claim from paying my husband's taxes.  I reiterated that my husband is not a corporation or an LLC of any sort, etc.  And it just got left hanging in the air after the meeting.  I did some research and found that injured spouse claims to the IRS are not routine and are pretty bound up with divorces and similar circumstances.

 

The trustee sent my lawyer a letter this week saying HE might have a claim against my husband (who isn't part of the BK) for the tax payment.  WTF??  My lawyer said that no matter what, my claim would be ahead of his, so he isn't sure why he is trying to bypass me in the process.  I am so confused by all of this.  It's no different that my paying excess tax throughout the year and then our tax burden being lower at the end, his self-employment taxes being wrapped up in our joint obligation.  Unless I felt "injured" in some way, I guess.

 

Any opinions as to whether he has a right to make this claim?  I was hoping this BK thing would be bringing my whole CC and lawsuit mess to a close, sooner than later.

[chicamarie]

Also, FWIW, I felt completely profiled by the trustee at the meeting.  My lawyer's other clients were ahead of me:  one woman who was doing BK for the second time, who had given her ex-husband, who still lives with her, all her cash right before the BK, smiling as she said it, and the trustee didn't bat an eye; a couple who had racked up debts at all manner of places (no judgment) and looked pretty relaxed about the whole thing. 

 

And maybe because I have a job, and a house, and because my debt isn't super sky-high, he grilled me, and latched on to the tax thing, and was basically salivating.  This is after making a joke about my husband's work truck. a 1994 Nissan pickup, being a "classic car".  So, he wants to target the guy who would love to buy a new truck but WE DON"T HAVE ANY MONEY.  What a POC.

 

Thanks for listening to my rant.