341 Today...Questions
Wow, do I wish that I had found this forum long ago. It would have answered so darn many questions for me PRIOR to our 341 meeting today....oh well....
Anyway, here's the overview of where things stand:
My wife and I are both self-employed, since I lost my jtraditional job in January '06. On advice of counsel at that time, we stopped making payments on approximately $80K of consumer debt. Most of it was at low or zero percent interest, so we were able to manage pretty well when I was working full time. As soon as we defaulted, the rates and minimums skyrocketed, and of course, we had no possible way to manage.
Took a year to file in order to protect some of our cash assets. Again, on the advice of counsel, we waited until we hadn't made payment or used credit for at least six months, and then decided to wait in order to protect a fairly significant tax refund for last year.
Filed on May 3. Hearing today, June 12.
We have two businesses. I am a trainer/consultant for school districts and other places. My wife sells on eBay. Our current income still meets the means test for C7 without difficulty.
We're feeling like we weren't as well prepared for today as we should have been, and I hate to blame our lawyer because ultimately, it's our own responsibility, but since we paid him to represent us, I thought we could count on his advice to be in our best interests. Unfortunately, we have some concerns.
First, we were under the impression that we were allowed to claim up to $10K in assets as exempt. We did not understand that there were only certain items that were allowed to be included in that $10K. As it stands, we are way under the $10K figure, but there are approximately $3K in "assets" that are non-exempt, plus a car that is ridiculously valued at $3600 that is also non-exempt (we could only include an exemption on one car because they were both in my name). Our attorney told us that we HAD to use the low retail figure on the car despite the fact that the car has been off the road for a year and needs somewhere in the neighborhood of $1000 in work to become ready for the road again. We only reaffirmed the loan because we thought we would still be under the $10K figure including that car! Now-after the fact-we find out that isn't the case, and that in order to keep the car, we're going to have to "make an offer" to the trustee. Truth is, I would rather just turn that car over to him-and good luck getting anywhere near that $3600 from it! But the attorney who represented us at the meeting today (who is not the lead counsel in the firm who we had been working with in filing the petition-we had never met him before) told us that if we were going to turn over the car that we would then ALSO have to turn over the OTHER non-exempt assets listed on our claim-things like our snowblower, lawn mower, patio furniture, air conditioners, and a few other things.
Is that true?
In order to turn over the car at this point, do I HAVE to turn over all the other stuff?
Because that would truly stink.
I would have no problem turning over the car and then making a payment arrangement for a percentage of the remaining assets. If the trustee agrees to that, what percentage of the assets should we "offer" in cash, or will the trustee just tell us what he wants?
Meantime, we've been asked to show how we arrived at the dollar figures for some of our assets. That's upsetting, because the lawyer told us to use "garage sale value" (right out of his pre-filing manual), and the Trustee told us that since we sell on eBay, that we should be using eBay values-which doesn't seem fair or prudent, because most of the things we've exempted are not "eBayable." They're not significant enough for a potential buyer to pay for both the item cost and shipping-so essentially the eBay value is zero (but I know they don't look at it that way).
He is also filing an objection to our lawyers attempt to get some "accounts receivable" exempted. We didn't think he'd go along with it, but it was worth a try.
We also did not include a PayPal account that we have as an asset anywhere on our documentation. Fortunately, as of the date of filing, the balance was -$50. But a red flag, nonetheless. It wasn't an intentional omission by any means-it was just not an asset. We should have included it....
What about future earnings/spending? Given that he asked for more information, but indicated that a further appearance may not be necessary, does it appear likely that he will be investigating our future earnings? Would there be a reason to? We're so weary of this whole process, and so desperately want to be able to really get that "fresh start" that they talk about. Having the trustee examining future earnings as we move forward would certainly put an emotional damper on things! We just want to be DONE!!
Sorry for the lengthy description of circumstances! And thanks very much for any words of wisdom!!
Anyway, here's the overview of where things stand:
My wife and I are both self-employed, since I lost my jtraditional job in January '06. On advice of counsel at that time, we stopped making payments on approximately $80K of consumer debt. Most of it was at low or zero percent interest, so we were able to manage pretty well when I was working full time. As soon as we defaulted, the rates and minimums skyrocketed, and of course, we had no possible way to manage.
Took a year to file in order to protect some of our cash assets. Again, on the advice of counsel, we waited until we hadn't made payment or used credit for at least six months, and then decided to wait in order to protect a fairly significant tax refund for last year.
Filed on May 3. Hearing today, June 12.
We have two businesses. I am a trainer/consultant for school districts and other places. My wife sells on eBay. Our current income still meets the means test for C7 without difficulty.
We're feeling like we weren't as well prepared for today as we should have been, and I hate to blame our lawyer because ultimately, it's our own responsibility, but since we paid him to represent us, I thought we could count on his advice to be in our best interests. Unfortunately, we have some concerns.
First, we were under the impression that we were allowed to claim up to $10K in assets as exempt. We did not understand that there were only certain items that were allowed to be included in that $10K. As it stands, we are way under the $10K figure, but there are approximately $3K in "assets" that are non-exempt, plus a car that is ridiculously valued at $3600 that is also non-exempt (we could only include an exemption on one car because they were both in my name). Our attorney told us that we HAD to use the low retail figure on the car despite the fact that the car has been off the road for a year and needs somewhere in the neighborhood of $1000 in work to become ready for the road again. We only reaffirmed the loan because we thought we would still be under the $10K figure including that car! Now-after the fact-we find out that isn't the case, and that in order to keep the car, we're going to have to "make an offer" to the trustee. Truth is, I would rather just turn that car over to him-and good luck getting anywhere near that $3600 from it! But the attorney who represented us at the meeting today (who is not the lead counsel in the firm who we had been working with in filing the petition-we had never met him before) told us that if we were going to turn over the car that we would then ALSO have to turn over the OTHER non-exempt assets listed on our claim-things like our snowblower, lawn mower, patio furniture, air conditioners, and a few other things.
Is that true?
In order to turn over the car at this point, do I HAVE to turn over all the other stuff?
Because that would truly stink.
I would have no problem turning over the car and then making a payment arrangement for a percentage of the remaining assets. If the trustee agrees to that, what percentage of the assets should we "offer" in cash, or will the trustee just tell us what he wants?
Meantime, we've been asked to show how we arrived at the dollar figures for some of our assets. That's upsetting, because the lawyer told us to use "garage sale value" (right out of his pre-filing manual), and the Trustee told us that since we sell on eBay, that we should be using eBay values-which doesn't seem fair or prudent, because most of the things we've exempted are not "eBayable." They're not significant enough for a potential buyer to pay for both the item cost and shipping-so essentially the eBay value is zero (but I know they don't look at it that way).
He is also filing an objection to our lawyers attempt to get some "accounts receivable" exempted. We didn't think he'd go along with it, but it was worth a try.
We also did not include a PayPal account that we have as an asset anywhere on our documentation. Fortunately, as of the date of filing, the balance was -$50. But a red flag, nonetheless. It wasn't an intentional omission by any means-it was just not an asset. We should have included it....
What about future earnings/spending? Given that he asked for more information, but indicated that a further appearance may not be necessary, does it appear likely that he will be investigating our future earnings? Would there be a reason to? We're so weary of this whole process, and so desperately want to be able to really get that "fresh start" that they talk about. Having the trustee examining future earnings as we move forward would certainly put an emotional damper on things! We just want to be DONE!!
Sorry for the lengthy description of circumstances! And thanks very much for any words of wisdom!!
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