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Schedule Questions

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  • Schedule Questions

    Hi Everyone,

    I'm new to the forum. What a wealth of information here! Reading others stories, explanations, and recommendations have eased my concerns. I stumbled across this forum while trying to find an answer to some exemption questions.

    I am preparing to file Ch 7 bankruptcy pro se. I have downloaded the individual fillable forms from us.courts.gov website, and began filling them in. I borrowed the 2013 version of the Nolo Ch 7 bankruptcy book from the local library. I have researched much of the information from online sites including Nolo.

    My situation:

    I live in Kentucky. I am single. I owned and operated a backyard retail flower nursery. The business was structured as a sole-prop. I didn't have enough capital to keep it running after startup. The business completed its 2015 season, but I couldn't buy the supplies necessary to reopen for 2016. I have several creditors ranging from business credit cards to equipment lease, and product supply business. The combined debt is less than $50,000. No debt was added to the list after the close of the nursery. From my calculations the debt is 87% incurred by the business.

    I fell into a real funk after the failed business. I have been unemployed since. I have been living with a relative as a dependent. I have sold some of my things over the course of the last two years to have a little extra $. No large assets or anything just small home goods on Craigslist like hiking backpack, printer, miscellaneous mechanics tools etc.

    I have no large assets. No home, vehicle.

    My questions

    As I understand it, Schedule I is for current active income. I haven't had any income from selling anything since May. Being unemployed and no other income, do I fill in Schedule I with all zeros?

    Living as a dependent with a relative, I don't have any expenses. When I have had a few dollars I would buy some clothes from goodwill or some food for the household, but it certainty not a monthly expense. So again, do I fill all the spaces with zeros for Schedule J?

    I can claim federal exemptions. Basically the only three exemptions that apply to me are the home goods, wildcard and the partial homestead exemption applied to any property. I read the laws etc, but applying it to real world assets I question myself.

    Can the partial homestead exemption be applied toward multiple assets up to an aggregate of $11850 or just one asset up to that amount? I think the answer is yes.

    Same question regarding the wildcard?

    Regarding the home goods exemption, I read on Nolo it says, " $12,625 aggregate value ($600 per individual item) on household goods (furnishings, appliances, clothes, books, animals, crops, musical instruments)."

    I have very little normal home furnishings. Like I said I live with a relative so really everything I use in the house is there's. Most of "my" belongings are tools.

    I have a collection of carpentry tools: items from the 1970's - 1980's: 10" tablesaw, bandsaw, Jointer/planer, router, bench drill press, chopsaw, small portable compressor, sabersaw. Small carpentry hand tools. Basically you get the idea. I have a collection of plumbers hand tools. I also have a small collection of mechanics hand tools. I also have some gardening tools: push mower, weed eater, hedge trimmer, tiller, and hand tools. I also have a portable 5000 watt generac generator. I am kind of a handyman at heart and love to fix things. None of it is new stuff. Much of it was passed down from both my Grandpas.

    Can these items mentioned fall under the home goods exemption? If able to exempt other property with the wildcard+ exemption the home goods would be the only one that might work.

    Can I use the wild card plus unused homestead exemption to exempt the business owned greenhouse and nursery equipment? I think I would like to restart under a new business concept. So I would like to retain the greenhouse etc.

    Lastly, can the tools of the trade exemption be used to exempt business chemicals and plastic pots? The business license is still active.

    Sorry it is so long, but I thought it better to provide as much detail as possible.

    Thanks for everyone's recommendation!




  • #2
    Welcome to BKForum!

    Originally posted by D3VEA2A View Post
    As I understand it, Schedule I is for current active income. I haven't had any income from selling anything since May. Being unemployed and no other income, do I fill in Schedule I with all zeros?
    Income is as of the date of filing. If you have nothing to report, the instructions ask you to write $0.

    Originally posted by D3VEA2A View Post
    Living as a dependent with a relative, I don't have any expenses. When I have had a few dollars I would buy some clothes from goodwill or some food for the household, but it certainty not a monthly expense. So again, do I fill all the spaces with zeros for Schedule J?
    While most people don't spend money on clothes every month, they do have a clothing expense. I would annualize the expense and divided by 12. For example, I would spend about $3,600 a year on family clothing. I would put $300/month even though I don't buy every month. For food, you must be eating, so you'll have to figure out something ($600/month?). What about toiletries or other personal items?

    Originally posted by D3VEA2A View Post
    Can the partial homestead exemption be applied toward multiple assets up to an aggregate of $11850 or just one asset up to that amount? I think the answer is yes.
    If you reread the "unused homestead exemption" it becomes another wildcard to exempt the "aggregate interest in any property." I don't know the interplay of the true wildcard and the household and other goods exemption. (e.g. if a single household good is $800 but you have unused wildcard, can you exempt under the wildcard section (d)(5) the entire $800 rather than being restricted by the household goods section (d)(3)?)

    Originally posted by D3VEA2A View Post
    Same question regarding the wildcard?
    This is based on the same section of code as the response above.

    Originally posted by D3VEA2A View Post
    Regarding the home goods exemption, I read on Nolo it says, " $12,625 aggregate value ($600 per individual item) on household goods (furnishings, appliances, clothes, books, animals, crops, musical instruments)."

    I have very little normal home furnishings. Like I said I live with a relative so really everything I use in the house is there's. Most of "my" belongings are tools.
    Then you have none of those items.

    Originally posted by D3VEA2A View Post
    I have a collection of carpentry tools: items from the 1970's - 1980's: 10" tablesaw, bandsaw, Jointer/planer, router, bench drill press, chopsaw, small portable compressor, sabersaw. Small carpentry hand tools. Basically you get the idea. I have a collection of plumbers hand tools. I also have a small collection of mechanics hand tools. I also have some gardening tools: push mower, weed eater, hedge trimmer, tiller, and hand tools. I also have a portable 5000 watt generac generator. I am kind of a handyman at heart and love to fix things. None of it is new stuff. Much of it was passed down from both my Grandpas.
    These seem like tools of the trade and may go under that exemption.

    Originally posted by D3VEA2A View Post
    Can these items mentioned fall under the home goods exemption? If able to exempt other property with the wildcard+ exemption the home goods would be the only one that might work.
    I don't know and the question is whether those tools are used to maintain "your" home or are they tools that you use in a trade (handyman, Mr. fixit, contractor, etc).

    Originally posted by D3VEA2A View Post
    Can I use the wild card plus unused homestead exemption to exempt the business owned greenhouse and nursery equipment? I think I would like to restart under a new business concept. So I would like to retain the greenhouse etc.
    If the business owns it, then it belongs to the business, not you. The real question would be, what is the organization of the business? Corporation, LLC, partnership, or sole proprietership? If it's a sole proprietorship, then the business is not a legal entity; it's you. I would think that if you're Mr. D3VEA2A d/b/a Mr. Fixit, then these are not business assets, but your assets used as you do business as Mr. Fixit.

    Originally posted by D3VEA2A View Post
    Lastly, can the tools of the trade exemption be used to exempt business chemicals and plastic pots? The business license is still active.
    Look to the question on organization. If you are d/b/a Mr. Fixit, then these are tools of the trade. Otherwise, if the business is its own legal entity, the tools, implements, and inventory belong to the business and not you.

    Please remember that this is not a legal definition and only my opinion. You should have this clarified by an attorney. I don't know how much inventory, tools, or equipment belongs to that business. I don't know the organization of your business.
    Last edited by justbroke; 09-16-2017, 08:23 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


    • #3
      JB, thanks for the response.

      First, the nursery business is structured as a Sole Proprietorship. So, it is not a separate entity. Thus, it would make the greenhouse, equipment, and any inventory my assets. Correct? Which means I can use the federal exemptions to exempt up to the available dollar amount of exemption for those assets (ie tools of the trade, wild card, and/or "unused homestead exemption".)?

      Pertaining to the carpentry tools etc, I have never had a handyman business (I.e. Mr Fixit) nor pursued clients to perform work for. I have done projects and repairs for relatives, but that is the extent. I consider the tools used for personal, hobby projects and personal maintenance. I don't think the trustee would honor the use of the "tools of the trade" exemption on those tools. Do you think they would fit under the home goods exemption. I'm worried they won't. I'm trying to determine my priorities.

      Comment


      • #4
        Unfortunately, I can't explicitly tell you which exemption to use for which item. If it fits under the "tools of the trade" because it's for a business, then that would be appropriate. If they are personal tools, then they would go under your personal property exemptions (e.g. the wildcard, unused homestead exemption, household goods). You would need to make the determination as to which exemption to apply to which implement.

        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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