What are my options?

[steve_d]

I will try to make a long story short. I filed bk in Feb 2000 because I was unable to work after major surgery and my disability claim had been denied twice. I had no income and over 60k in debt. Later that year, my disability (Social Security only, not private) was approved. I also became engaged and my fiancee moved in with me. Between her income and my disability, we could live comfortably and I started to incurr new debt. A few years later, she left me and moved out. I was now trying to pay all my living expenses with my Social Security income only. I kept going further in debt. I got a part-time job a year and a half ago, but only can work ten hours a week for nine bucks an hour. The soaring energy prices really helped make things worse. The only way I managed to keep paying my bills, was using credit cards to pay living expenses and selling a few items my father left when he passed away. I am now out of options (no available credit and nothing else worthwhile to sell), can't make my minimum payments and understand I can't file bk again until next year (eight years after the last time.)

My income is 900/month from SSD and about 350 from my job.

Here are my questions:

Should I see some attorneys for the free initial consults even though I know I can't file for almost a year?

I rent my house and own no real estate except I am listed as a co-owner with my mother and brother on a family recreational property. It isn't worth much - maybe $45k, and I'm only 1/5th owner. Is this property at risk when I file? Should I do a quit claim on it?

Could my minimal wages from my part time job be garnished if I can't make my payments?

About how long before filing bk can you stop paying cc bills and not worry about a judgement against you? I really have nothing other than Social Security and my part time job. I have only one vehicle and it's thirteen years old. But I really don't want a judgement hanging over me in the future.

I appreciate all your insights and have already learned things from this forum I wish I would have known before I filed the first time.

Thanks,
Steve

[bige1030]

If it will take you about a year to pay your bankruptcy attorney, they'll probably be willing to have you come in and commit to filing with them - and take your money while you wait it out.

The property is at risk since it's a recreational property (and not a home). Just giving it to someone else isn't wise at this point - that might be seen as fraudulent. The least that could happen in that situation is that the trustee will somehow try to "undo" the transaction (e.g. sue your mother and brother for the value of your property) when you file.

The rule for garnishments varies from state to state, but I think that you must be allowed to keep at least 30 times the federal minimum hourly wage per week ($154.50). As far as your vehicle is concerned: check your state's exemptions. Most likely there is one that you can use to protect the vehicle.

I don't really know the timeline between stopping of payment and them getting a judgment. Consult the collections forum on here - or maybe someone else could chime in. A year is probably enough to barely get a judgment...they probably won't give up on collections too soon.

[steve_d]

As I've done more research, I find that in Michigan one can choose Federal exemptions rather than state. This allow $8725 of unused Homestead for any property. I could use this on my share of our family's recreational property, correct?

[SamanthaJones]

You have to live in the place to claim it as homestead.

You are living in total poverty. No way would your wages be garnished. Why don't you sign off on that property to your family, and then let the bills go away, they'd have nothing to take from you. It would cost you maybe two months worth of income to file a CH7 if you used a lawyer.

[steve_d]

"You have to live in the place to claim it as homestead."

Was this comment directed specifically to me? Since I rent my home, I won't be using the Homestead exemption. The Federal Exemption says you can use $8725 of unused Homestead Exemption towards any property.

I also just found this: "5. How often can I file bankruptcy?

You can file for Chapter 7 bankruptcy again after six years has passed from the date of your last filing. A Chapter 13 bankruptcy can be filed at any time."

here: http://www.michiganbankruptcy.com/faq.html#104

I thought it was eight years??? Can someone clarify?

[BKTango]

As far as using the homestead exemption I am not sure if you would be allowed to use it since you rent and the property you own 1/5 of is recreational. This would be a good question for a bk attorney really. If you haven't done so you may want to set up a few free consultations with about 2-3 bk lawyers in your area, they are free and might give you some insight into that matter.

As far as the waiting period is it 8 years after your last chapter 7 filing, be careful of information you get off of some websites, I have found that alot out there have not updated some of their facts and info since the laws changed.

You being on disability it would be damned hard for a creditor to get a judgment against you but sorrier things have happened, as far as how ling would it take. Some people have not paid on anything for years and not be bothered, others a few months. The most common thing is they start extreme collections then third party collections and possible lawsuits around 6 months after non payment. They would have to serve you, you answer the summons (at which point you let the court know you are on disability) then you have a court date and they get a judgement (if they win) and then they have to go about getting some money. Again I wouldn't concern myself to much on that. You have some time. If this should happen before you can file, the debt can still be discharged, you would just have to petition the court to vacate the judgement.

[SinkingFast]

"You have to live in the place to claim it as homestead."

Was this comment directed specifically to me? Since I rent my home, I won't be using the Homestead exemption. The Federal Exemption says you can use $8725 of unused Homestead Exemption towards any property.

I also just found this: "5. How often can I file bankruptcy?

You can file for Chapter 7 bankruptcy again after six years has passed from the date of your last filing. A Chapter 13 bankruptcy can be filed at any time."

here: http://www.michiganbankruptcy.com/faq.html#104

I thought it was eight years??? Can someone clarify?

Those websites have old information posted.

The Federal Exemptions have been updated.

http://www.bankruptcyaction.com/fedexemptions.htm

And then for a situation such as yours,...............

"Section 522 of the Bankruptcy Code permits a debtor to exempt certain assets from the bankruptcy estate under either federal or state law. Though Beaucage was ineligible for a Massachusetts homestead allowance because she didn't own her home, she did qualify for a federal "wild card" exemption under Section 522(d)(5), which permits a debtor to exempt an asset valued at up to $975, plus up to $9,250 of any unused amount of the homestead exemption set forth in Section 522(d)(1)."

http://www.duanemorris.com/articles/article2278.htmlhttp://en.wikipedia.org/wiki/Chapter_7

All property transfers within a year prior to filing must be disclosed. If you transfer your interest in the recreational property within a year of filing BK, you will have to declare it.

[spell]

Based on your information, you are almost judgment proof.
Sell your piece of the property over to your family for your even share of the value.
Live off of that plus your income.
By the time any of these creditors bother getting to you, you'll either have spent it down or will have recovered enough to be gainfully employed to repay them.

Focus your efforts on finding income. Even if bankruptcy were available, it doesn't solve your problems.
Also focus your efforts on obtaining all available public aid.

[steve_d]

Thanks for pointing me to the updated info. I was sure I had read about the eight years between filings.

As I read it, since I wouldn't be using a homestead exemption on my residence (since I rent) the homestead exemption would be "unused." Therefore, I could apply the $9250 of unused homestead exemption to my share of our recreational property (or any other property.) I can't sell this to my family, as being "part owner" was a gift and they wouldn't pay me money to get back something I never paid for in the first place. I also don't want them to know about the bk if I can help it. Once was bad enough.

Also, I'm totally and permanently disabled and the job I have now is as much as I'll ever be working barring some medical miracle. However, my income already is too much to get any other public aid (about $15k/yr - well over the low income guidlines for a single person.) My part time job put me over the limit to get the home heating credit I used to get and also reduced my property tax credit by over $100. Granted that's small amounts compared to the extra income, but it sure doesn't make a person feel good about trying to earn a little money to supplement the disability