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Some specific questions in regards to filling out Chapter 7

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  • Some specific questions in regards to filling out Chapter 7

    Hi,

    I had some specific questions in regards to the paperwork that I'm hoping someone could help me with.

    Do I list a tax refund amount if I am paying back taxes to the IRS? Any refund I might get goes directly to them, as I'll be on a payment plan with them for the next six or seven years.

    For a vehicle repossessed over a year ago... is this still considered a secured debt?

    I have a loan at my bank account and the payments are automatically tied to my account. They take the payments directly out of any deposits I get. Is this considered a secured loan since it's tied to my bank account?

    In addition, I am reaffirming my debt with the bank. In cases like these, do they still usually freeze your account?

    And last, I've seen some example forms where people list their family pets (pure breeds) as zero value while others they put an amount. For example, someone put $300 for a chihuahua, even though it's a family pet. If I have two chihuahuas what value should I put these as?

    Thanks for your help!

  • #2
    Originally posted by bankrupt3000 View Post
    Do I list a tax refund amount if I am paying back taxes to the IRS? Any refund I might get goes directly to them, as I'll be on a payment plan with them for the next six or seven years.
    Even if your tax refunds are used to "setoff" a previously old tax debt, it's still a refund. On your Statement of Financial Affairs (SOFA) you would list those tax refunds regardless of the fact that the IRS used them to pay old debt.

    Originally posted by bankrupt3000 View Post
    For a vehicle repossessed over a year ago... is this still considered a secured debt?
    No. Any deficiency would have been reduced to a "deficiency" and that deficiency is unsecured debt which is subject to discharge.

    Originally posted by bankrupt3000 View Post
    I have a loan at my bank account and the payments are automatically tied to my account. They take the payments directly out of any deposits I get. Is this considered a secured loan since it's tied to my bank account?
    What determines whether a loan is secured -- or a secured loan -- is based on whether or not you pledged property in order to obtain (and hence, "secure") the loan. Simply having payments taken directly from an account is just the payment aspect of the loan. Many people have "automatic" payments arranged so that they don't forget (and most banks offer a discount for loans paid in this manner).

    Pledging property, which could include anything from a car, money in a bank account, or a home, is what secured a loan and makes it a secured debt.

    Originally posted by bankrupt3000 View Post
    In addition, I am reaffirming my debt with the bank. In cases like these, do they still usually freeze your account?
    There is absolutely positively ALMOST no reason to ever reaffirm any debt with a bank. There are some exceptions with certain credit unions and lenders that require reaffirmation or repossession (such as Ford Motors Credit Corporation). Otherwise not one person has ever given a "good" reason to reaffirm an otherwise dischargeable debt. This is such an issue, with debtors attempting to reaffirm debt that has no recourse anyhow, that several courts never approve such reaffirmations as they are not in the best interest of the dbtor.

    Originally posted by bankrupt3000 View Post
    And last, I've seen some example forms where people list their family pets (pure breeds) as zero value while others they put an amount. For example, someone put $300 for a chihuahua, even though it's a family pet. If I have two chihuahuas what value should I put these as?
    You can put whatever value you spend on the pet. Whether or not the United States Trustee (UST0 will allow such high amounts for pets is entirely debatable. For example, if you put $600 for two pets, the UST is likely to strongly object to any discharge and file a Motion to Discharge. While the reasoning may seam harsh, the UST's position is that your creditors suffer because you want to care for animals that you can't afford. This is also a reason that people hire attorneys so that they have the benefit of the attorney's experience with these specialized questions of law. (There is nothing in the code -- IRS Financial Collection Standards -- which accounts for pets. Under the IRS FCS, people literally feed and house their pets by "sharing" the allowed expenses for the debtor and her family.)
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog


    I am not an attorney. Any advice provided is not legal advice.

    Comment


    • #3
      Thanks for your help!

      Comment


      • #4
        jb ~ I think we're talking VALUE of the chihuahuas here.

        To the OP -- I'd list the value as whatever you paid for the dogs. Or if you had to sell them to someone, how much do you think you could get?

        jb thought you were trying to justify $600/mo expense to care for the dogs.

        Comment


        • #5
          Right, it's just the value. I bought them four years ago, and they are family pets. No monthly expenses besides dog food and their annual trip to the vet.

          Comment


          • #6
            I was thinking that Chihuahuas eat a LOT! Thank you both for bringing me back to earth. You should be able to find some exemption to exempt the monetary "value" of your pets. I'm not even sure $300 is the proper value unless they are purebreds, young, and capable of breeding. (I took a quick gander at rates and the average seemed to be $100-$150. Age, type, and breed may have more impact and demand higher value. I used Craigslist.)
            Last edited by justbroke; 09-02-2017, 12:45 PM.
            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
            Status: (Auto) Discharged and Closed! 5/10
            Visit My BKForum Blog: justbroke's Blog


            I am not an attorney. Any advice provided is not legal advice.

            Comment


            • #7
              Originally posted by justbroke View Post
              I was thinking that Chihuahuas eat a LOT!


              I needed and appreciate that smile this morning. Thanks.

              I've had a couple of those moments myself lately. Lol

              Comment


              • #8
                One other quick question:

                On the exemption form (the form where you list what will fall under your exemptions) I wanted to use the federal exemptions. I noticed to the right is a column that mentions something like: Which state law exempts this? or something similar to that. If I'm using federal exemptions, is there anything I need to list in that column? I've been reading the Chapter 7 Nolo book, and I'm not seeing a specific mention of this. Thanks!

                Comment


                • #9
                  That column is specifically for any "law" which allows you to claim the exemption, Federal or State. Many Federal exemptions are in 11 USC 522 but there may be others outside Title 11. The use and application of exemptions is an important part of completing the bankruptcy forms.

                  I'm worried because the form (Official Form 106C otherwise known as Schedule C) has a column which reads "[s]pecific laws that allow exemption" and does not include the word "State" at all.

                  Are you using the correct forms? Always get your forms from the U.S. Bankruptcy Court's Official Forms site.
                  Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                  Status: (Auto) Discharged and Closed! 5/10
                  Visit My BKForum Blog: justbroke's Blog


                  I am not an attorney. Any advice provided is not legal advice.

                  Comment


                  • #10
                    I see what you're saying. For some reason I thought it said state. I see I'm going to have to search for more resources on this in order to understand what all of this means. Thank you again!

                    Comment


                    • #11
                      The Official Forms were last changed in late 2015 I believe so they may differ than what's in any Nolo Guidebook. The Nolo guidebook is a good resource, but the actual "art" of completing the forms is something that can't be taught through books. The forms can change and the local practices (and forms) requires you to go beyond the book. Selecting exemptions is a question of law, so while a guidebook may say that you need to find them and suggest ways to determine which are available to you, you still must perform the research task.
                      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                      Status: (Auto) Discharged and Closed! 5/10
                      Visit My BKForum Blog: justbroke's Blog


                      I am not an attorney. Any advice provided is not legal advice.

                      Comment


                      • #12
                        I got started thinking...

                        My bank loan is for overdraft protection. Each month they automatically pull money from my direct deposits until they get their minimum payment.. then they will "cover" anything automatically if it would make me bounce. So in essence, this line of credit is being used every month.

                        I remember seeing multiple times about not using credit for at least 3 months before filing because of a presumption of abuse. Wouldn't this be considered to fall underneath that heading if I try to discharge it? The line of credit was open (at least until today as I found out my account was frozen today). It has transactions on this line of credit, as they are using it at will to cover my checking account and keep me from bouncing after taking deposits to make the minimum payment.

                        As to the frozen account (they must have received notice of my filing yesterday), is it this way forever now? I called the bank and was told the manager didn't know, and that she would have to call me back next week.

                        If the usage on the account would be considered a presumption of abuse, I would just rather try to reaffirm the loan anyhow. Possibly at a lower interest rate or a cheaper monthly checking account rate, etc. I'm going to need something to help me re establish credit anyhow after the bankruptcy.

                        Comment


                        • #13
                          I would try not to use the overdraft line. Otherwise, I would not worry about it. My overdraft line was dinged just before filing and I still had a negative balance on my checking account (the entire line was used).

                          Since your checking account was tied to a line of credit (was this NFCU or USAA?) then the checking account will eventually close. When the accounts are linked together such as NFCU's NAVCHEK, the base checking account and the NAVCHEK behaves as a single account (if it is NFCU, you'll notice they have the same prefix on the account number, only the suffix is different).

                          Forgive me, but are you in a credit union (CU)? There is no way a judge should let you reaffirm an unsecured line of credit. What is the reason?

                          Additionally, I would make sure I have a new account elsewhere (different bank) and move any direct deposits to the new account. One of the first things BKForum members tell new members is to move your deposit accounts away from banks where you have credit products. Especially linked lines of credit such as NFCU's NAVCHEK.

                          Another thing that BKForum members like to tell new members is that you should never reaffirm so that you have "credit." Your credit is destroyed. Reaffirming does nothing but put you back on the hook for something that you literally do not need to [pay. It will not improve your credit. Within 6 months of discharge in a Chapter 7, most people's credit is as good as and sometimes better than before filing.
                          Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                          Status: (Auto) Discharged and Closed! 5/10
                          Visit My BKForum Blog: justbroke's Blog


                          I am not an attorney. Any advice provided is not legal advice.

                          Comment


                          • #14
                            Hi JB,

                            The original reason I wanted to reaffirm was due to rebuilding credit. Then I got started thinking today (they froze the account today) about the overdraft line of credit and how that might be considered a presumption of abuse, since it has been used in the last three months. I'm just trying to pass this time of bankruptcy as smoothly as possible, and I'd rather just pay it if it will cause adversary proceedings since it was used.. I'm not with a credit union. I also thought if I reaffirmed that they might unfreeze it and I could continue to just use it.

                            Comment


                            • #15
                              I would not worry about the overdraft line of credit. It won't be considered abuse. No judge, in their right mind, will let you reaffirm the debt. The creditor would need to prove fraud. You would to have spent more than $750 on luxury goods (not food, shelter, gasoline, car repair, rent/shelter, or anything that are considered necessities).

                              How much are we talking? Is it more than... say... $4,000?
                              Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                              Status: (Auto) Discharged and Closed! 5/10
                              Visit My BKForum Blog: justbroke's Blog


                              I am not an attorney. Any advice provided is not legal advice.

                              Comment

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