Chapter 7 ...

[Newposter]

I am going to file chapter 7. I am using the State legal aide service. I cannot afford to pay a lawyer. Honestly, I would have to borrow the money, and that seems like fraud to me since I would have to list that debt also in BK. and I know it up front.

Well, anyway. This is the situation. I have 6 horses. Thoroughbreds. 3 horses are on a boarding farm in Virginia. I currently owe $9,000 and that bill increases by $900 each month. The farm will not release the horses until that bill is paid in full. They and I both doubt the horses are worth that much at this point. This is why they haven't done a sheriff's sale. With some work and time they could be brought back into condition to race again...but this is not a training center..and the farm isn't going to pay for that.

I have 3 horses on a boarding farm in Kentucky. A mare and her 2 foals (1 yearling, 1 new born). Thoroughbreds. I owe $26,500 total in stud fees. And $4,500 in farm fees which are increasing by $600 each month. The farm is not going to allow those horses to leave until the full boarding fee is paid. Also..the stud owner will not allow the sale until the stud fee is paid in full. I might be able to make a deal to pay the stud fee from the auction price...but the farm will not allow the horses to go to the auction.

In both cases, the farms are likely to destroy the horses rather than to be left holding the bag.

So...if I make a deal with someone to take these horses and pay the bills...they would take the risk of paying to train and/or auction them to get their money back. Might pay enough, might pay quite a bit more, might lose a lot of money. Hard to know for sure.

The thing is...the auction is in August....this must be done right now or the opportunity is gone. That yearling must be sold in the yearling sale ...if he goes to the January sale...he has to be broken and in training. Big additional investment....I won't find someone to go that far....so it must be August. The entry must happen before June 15...the auction house will send out a rep to check out the horse...the farm will not allow this. the deal needs to be made now if I can. For the older horses...training them to run will require 3 months of training...the racing season ends Dec. 31. Just barely enough time to make money (if that is even possible) to maybe come back to break even for someone who takes them and pays those bills.

So..what happens to my BK? Am I in trouble for liquidating an assets? Am I in trouble for "preferring one or two creditors over the others"? Since the deal has to include the stud fees and farm bills.

To finish...I have no income. I have no prospects for income. I also have approx $30,000 in vet bills...two vets already have judgements against me. I have no credit card debt. I have no car loans, no mortgages. I have no assets other than my car 2002 Toyota Camry. I believe I will inherit my fathers house in the next couple years. I hope to not lose it to judgements. If I have no prospects next year, I will file for Social Security ...I am 65. My credit is already trash....BK offers me the chance to start over and maybe recover from the mess my life has become.

The free legal service I am using (because I have no other option) seems pretty clueless. They handle BK due to medical bills, credit card debt, etc...not someone who does not fit the mold.

[justbroke]

I would recommend finding 3-4 other bankruptcy attorneys that do free consultations and ask about property transfers. Typically transferring property before filing is not a problem if you received fair market value (FMV) and it's even more clean if it's an arm's length transaction (e.g. not a relative or friend or other "insider"). However, you have some property issues that are a little complex. If you file bankruptcy, you can surrender the horses and be done. That would give the Trustee the rights if the Trustee want's to dabble in breeding/racing; probably not. In any event, you would not have this burden. (I sense an undertone that you don't want the horses "destroyed" but if it's a financial drag and quagmire, then you may have no choice but to allow the Trustee to perhaps abandon this "property" (horses) and allowing the lienholder to deal with them... I just don't know.)

I'm not positive, but the Trustee might sell them as well. Since they would become property of the Estate, the Trustee could just sell the horses if it would generate enough money worth the Trustee's time and to satisfy the liens. I'm guessing that there are one or more liens on each horse? Then this is just secured property (yes, that's what we call it), and you might just surrender the property in the bankruptcy.

As for the farm, if the owner is that stubborn and you have explained all this to him/her, then you just have one foolish farmer (to not let the horse go to auction on something you say they "know" isn't even worth the fees).

Let me make this simple for you. If this is an entirely unknown situation and you will spend money and/or lose money in order to make this work, you're likely to find that just filing bankruptcy and surrendering the property is the best thing. This reminds me of the person trying to save their home before filing bankruptcy, by selling their underwater home. That person, selling the home, just wasted time and effort and probably their sanity while doing something that could have been accomplished by surrendering the property in bankruptcy.

Again, I really think you need some real consultations, but I don't know your true motivation to try to deal with this outside bankruptcy.

[Newposter]

I have talked to several attorneys...once they know I cannot pay their fees ($1,200 - $1,800) they tell me to go to legal aide services. I have not found a lawyer who would talk to me....and I have spent months looking. Can you give me a name?

The stud owner is not going to issue a title (foal papers) until the fee is paid. That means they cannot be sold until then. Yeah, someone could get their hands on those horses...but without the foal papers there is nothing that can be done with them. And..riding horses are free...no one actually pays for them because there are hundreds available. It's not like trying to save a home. No one is going to dynamite the home if you abandon it.

If those horses are destroyed while they are listed in the Jockey Club under my name I will be banned from every race track. Any idea I might have of working on the track in the future would be finished. Jockey Club makes the destruction on thoroughbreds very painful to the owners.

Anyone I could make this deal with is obviously someone who knows me from racing. It isn't that big a community. It would be a friend. Still..since I will not receive any money for the transfer..I think I am hearing I can go ahead with a deal. My motivation is to avoid the destruction of these horses. Aside from the fact that I raised them myself (except for the new foals), and rescued each of their lives during my ownership. I broke them , named them, trained them, raced them, bred them. Yeah, they are living creatures that I have an attachment to..I don't want to be the reason they are destroyed. Dumb as it sounds, I am in this position because of the monster bills to vets to save their lives after a couple of breakdowns on the track.

But..once they are gone from my name, the filing should be pretty simple? I have only an old car and no income. Seems like it should get very simple?

[despritfreya]

JB,

I have been communicating with Newposter on another forum. I would like to send him/her several names but I do not think I can PM him/her at this point. Can I send them to you and you can send them to him/her?

Des.

[justbroke]

despritfreya I can't send a private message either due to a minimum posting limit. You can send them to me private and I'll see what I can do.

Newposter If you want the names, I can send them to you on your registered email address, but I will only do that with your permission.

[Newposter]

Yes indeed! Thank you very much for your help!

[despritfreya]

I just sent a PM (I think) to JB. Did it as a test since this forum platform is new and I have not done a private message since the new system was set up. Want to make sure it is working. Once JB confirms I will send another message with the names.

Des.

[justbroke]

Newposter and despritfreya I forwarded the information as requested.

[bcohen]

To finish...I have no income. I have no prospects for income. I also have approx $30,000 in vet bills...two vets already have judgements against me. I have no credit card debt. I have no car loans, no mortgages. I have no assets other than my car 2002 Toyota Camry. I believe I will inherit my fathers house in the next couple years. I hope to not lose it to judgements. If I have no prospects next year, I will file for Social Security ...I am 65. My credit is already trash....BK offers me the chance to start over and maybe recover from the mess my life has become.

This is really the only thing you should worry about: you're poor, you're drowning in defaulted debts and judgments, you're probably not going to find a decent-paying job at your age, and you need to protect your future inheritance. Emotional attachment to your horses, or to the hobby or horse racing should not even play into the picture. You should file for Chapter 7 bankruptcy, list the horses as secured debt, list the other debts as unsecured, and let the trustee worry about selling them. Most likely, if the horses are as valuable as you say they are, the trustee will avoid the alleged "liens" on them, auction them off, and put the proceeds toward your debts. The remaining debts will be discharged. The farm will have no choice but to release the horses to auction, if the trustee orders them to do so.

[despritfreya]

Newposter

BC makes very good points and these are issues that need to be raised. Remember, most consultations are free so use the list to your advantage. Also, you might want to touch base with the self help center. Here is the link. . .

http://www.azb.uscourts.gov/filing-without-attorney

You can watch the Judge Case (Ret.) video but the info on the self help is below it. You can meet with an attny either in Phx or in Tucson depending upon where you are. The attnys volunteer their time.

As to your question on the other forum, I cannot advocate taking a cash advance off a credit card to pay for legal fees. Sorry.

Please keep us posted as I will, from time-to-time check to see how things are going.

Des.

[Newposter]

I plan to talk with the lawyers you sent the names to me. Thank you so much for that lead.

Meanwhile..I got a chance to give away the horses in Virginia...so I did. It was a restricted transfer ... Meaning the horses can never race again. Which is better anyway since it is very unlikely they could ever pay for themselves even if someone invested all the time and money to try to bring them back into condition.

So the farm that took them paid the debt to the boarding farm. They plan to geld them and use them for riding ponies. It is a retirement farm that uses horses for therapy.

It is the best possible answer for them.

Now...my question is going to be..if this causes me trouble...how long do I have to wait before I do not have to explain this mess on question 10? Since I received no money but that debt is gone.

[despritfreya]

I got a chance to give away the horses in Virginia...so I did. It was a restricted transfer ... Meaning the horses can never race again. Which is better anyway since it is very unlikely they could ever pay for themselves even if someone invested all the time and money to try to bring them back into condition. So the farm that took them paid the debt to the boarding farm. They plan to geld them and use them for riding ponies. It is a retirement farm that uses horses for therapy. It is the best possible answer for them. Now...my question is going to be..if this causes me trouble...how long do I have to wait before I do not have to explain this mess on question 10? Since I received no money but that debt is gone.

You would have to wait 2 years but that would make little sense. This is not "your problem". If you gave away an asset for less than fair value (your sales price was the board bill) then the Trustee could seek to set aside the transfer. The Trustee would contact the recipient. HOWEVER, as I mentioned before, Trustee's do not like things that require food and vet care. You disclose the transfer on question 10 with a complete explanation.

Also, if the facility that took the horses happens to be a qualified 501(c)(3) non-profit, make sure you tell this to the attny. Question 7 of the Statement of Financial Affairs covers this.

I hope at least one of the names on the list works out for you.

Des.