High debt chapter 7

[ssdsco]

[Boscoe]

Good morning. Here are my answers to your questions:



1. Is the attorney advising us correctly ? It just seems to good to be true. I actually feel guilty about doing this.

Yes, the attorney is correct. All retirement type accounts are completely exempt and you get to keep them. There is some provision for limiting the 401k's to $1 Million, but you are below that so no problems.Any deficiency judgement is discharged in the bk. You won't owe anything at all.Talk to your attorney on this. My recommendation is to let all the calls go to the answering machine. If any get through, tell them you have hired a chapter 7 Bankruptcy attorney and give them the attorney's #. The calls will drop way down when you do this. After you file, they will stop shortly thereafter, by law.

4. Will a high debt chapter 7 be handled differently than the average chapter 7 ?

No. While it is alot of debt, and there likely will be questions as to when and why it was incurred, if you kept good records over the past 12 months, you should be fine.

Any other questions, keep them coming. But talk to your attorney about them too. This is what they are being paid for.

If you file in December (after the 6 months goes by), your 341 meeting will be in January, the last day to object will be in March and you could be discharged and closed by St. Patty's Day!

[Minnymouth]

Boscoe is correct in the answers to your questions......

Retain your attorney, wait out the 6 months you need too and listen to the advice of your attorney....

Sounds like you shouldn't have any problems, but as always, things do happen. Make sure that any assets you do HAVE - that all the paperwork is in order, etc.

Keep us posted.

[ssdsco]

Thanks for the responses.

I plan to interview a 4th attorney next week and make a decision on which one to retain. Two of the 3 attorneys I already met with want to review 2 years worth of credit card statements and bank statements so I'm getting prepared.

I read through the forum to avoid asking questions already answered but I still a few questions -

1. My assets will exceed my state exemptions. We're fine with giving up many of the assets but there's a few we'd like to keep. Can I buy non-exempt assets from the trustee with my 401k money ? Also I read that it's OK to sell some of these non-exempt assets before I file and use the proceeds for basic living, medical, dental, eyeglass expenses. I will keep good records.

2. Are un-cashed checks from pension exempt ? I plan to use up my savings for basic living expenses until I file so I may have check or two un-cashed at the time I file. We’re using a debit card and bill pay service for all expenses so I’ll have very detailed records of all spending.

3. After my chapter 7 is discharged (approved) will I be able to make withdrawals from my 401k without having to hand it over to the trustee ? I didn’t understand the discussion on the 1 year period after discharge and what you have notify the trustee about.

I don't want to do anything that will jeopardize my case but I do want to take advantage of the things I can legally do.

This a great forum. Lot’s of valuable information and it’s great to hear from folks that are going through the same thing.

Thanks in advance.

[lrprn]

1. My assets will exceed my state exemptions.

Your home has already been foreclosed. What are the other assets that can't be covered by NY's exemptions?

Can I buy non-exempt assets from the trustee with my 401k money ?

Depends on the trustee. Some will offer a buy-back figure for an asset that can't be completely protected by exemptions, but others will take the asset to sell themselves and give you back the exemption value. Ask the attorneys you are interviewing about what may happen in your case.

2. Are un-cashed checks from pension exempt?

I'm concerned about how much cash you are going to have in your savings account when you file. NY exemptions allow "Cash, the lesser of either $2500, or an amount that, with annuity, totals $5000; in lieu of homestead" - http://www.bankruptcyinformation.com/NY_exemp.htm . Are you going to have less than this?

I'm not sure about the un-cashed checks from your pension. It depends on if the uncashed checks are still considered a part of your pension or if they are considered 'cash' outside your pension. Be sure to discuss this during your lawyer interviews.

3. After my chapter 7 is discharged (approved) will I be able to make withdrawals from my 401k without having to hand it over to the trustee ? I didn’t understand the discussion on the 1 year period after discharge and what you have notify the trustee about.

The monies in your retirement account are exempt. The trustee can't touch whatever was in your retirement account on filing day.

As far as what trustees need to be notified about after filing, that varies from court to court and trustee to trustee. Again, a good question to ask during your lawyer interviews.

Glad you are finding the forum valuable. Keep asking questions - we'll help you as much as we can.

[ssdsco]

Here's some clarification on my situation. I own 2 homes. One in Maryland that is just starting the foreclosure process. I also own a home in NY where we currently reside. I don't believe the home in NY has any equity after selling costs. I need the attorney to confirm.

I just moved from Maryland to NY in June. The previous 2 years I lived in Maryland so If I understand correctly I will use the Maryland exemptions which amount to $14k for husband and wife.

We have equity in 2 cars, an ATV, nice TV's, stereo's, lot's of furniture and household goods, power tools, appliances, generator, snow blower, I think the $14k will go pretty quick.

I should have about $3k in cash which could be in the form of an un-cashed pension check.

Thank you all for your feedback.

[Boscoe]

Just value those exemptions appropriately. If the TV costs $2k 3 years ago, it ain't worth near that now. Same with furniture, stereo, etc. Think of an estate sale would bring for each item - don't go overstating the value. As long as you are reasonable, it will fly. Believe me, exemptions that are not cars or houses don't get alot of play in bk unless they sound ridiculously low. So, make the $14k work for you.

[CindyLou]

You should ask your attorney, but from what I have read previously, any money you receive from your pension, as long as you keep it totally seperate form your other income or assetts, it should remain exempt. So I would assume that an uncashed pension check would be in that category. I can't think of a safer place than uncashed. If you were to put it into an account then it still be considered exempt, but a creditor should still levy that account and you would have to then prove it was exempt and get it back. I think your strategy of keeping the check it a good idea. What does you attorney say? What about restructuring or holding on the the pension payouts for a while? Is that an option? So you can liquidate some of our assetts and life off of them?

[CindyLou]

sorry, I re-read the previous post. Ithink Boscoe is right. I don't think you are going to need to liquidate. I think you will be fine. I was thinking you had furs and jewels and art, etc...... If you have 14,000 of exemptions with the things you listed them that is a heck of a lot of money to work with for exemptions. Is that correct, 14,000? You won't need to liquidate a thing if that's the case, so the uncashed check won't really be an issue.

[JRScott]

For your property you need to use garage sale/estate sale values. So its probably not worth as much as you think, most people overestimate the value of their personal property.

As for the cars you should look up the NADA car value for each and see where you sit there.

How old is the ATV? You probably need a value for it to, but if its several years old its probably not worth as much as you think.

[ssdsco]

Here's the link to the Maryland exemptions. I believe my wife and I are each eligible for $7K in exemptions per b.4 and b.5. I was wish paragraph f applied but I'm no longer domiciled in MD. I do own a house in MD.

http://www.totalbankruptcy.com/state_exemptions_maryland.htm

The ATV is 3 years old and was $7k when new. Has some minor body and mechanical problems.

Thanks for your feedback. When I retain my attorney I should be well prepared with my questions.

[JRScott]

3 year old ATV, 7k new, you say its got some problems, probably not worth more than 2k to 2.5k then if that. You might look in a second hand magazine for your area and see what a similar one is selling for to get an idea on price.

[ssdsco]

Update and a question.

I selected an attorney and plan to retain him the first week of October and get everything prepared for a 12/1 filing which is when I pass the 6 month means test.

Going through multiple free consultations was very good advice. I learned a lot and I'm sure I wound up with a better attorney than just going with the first attorney I consulted. I took a summary sheet of my situation to each consultation and took notes as the attorney's commented. The notes were very helpful in later finalizing on an attorney. One of the attorney's was really aggravated I was writing a lot of notes, asking a lot of questions and then really got aggravated when I told him I had to interview other attorney's before making a final selection. I was a senior executive for a large company, have dealt with many attorneys over the years so this process while embarrassing was like interviewing a contactor or day care provider for me. I can only imaging this process must be very intimidating for many of the folks filing bankruptcy but it’s really important you go through multiple consultations in order to insure the best result for your situation.

Here's the question. I'm getting my documentation ready for a financial review with the attorney. There's a question about gifts greater than $100 in the past year. The year would be from 12/06 to 11/07. We have always been very generous with our families and can prove this is usual and normal gift giving. In the period of Dec, 2006-May, 2007 we gave Christmas gifts, basic living support for my 80 year old parents, support for our adult daughter, daughter’s car breakdowns, "emergency" attorney fee's for another daughter, that type of “gifts“. These are mostly cash gifts or credit card payments on behalf of family members. The value ranges from $300 to $1500 per “gift“. Total is about $5k of which about half was on credit and the rest was cash from savings. None of these are assets that could be returned.

All these people are aware I'm filing bankruptcy so I don't care if the trustee contacts them but none of them have the money to repay the trustee.

I stopped working June 1st which is when the “gifts” stopped and I stopped paying my creditors.

Am I correct in assuming these are “gifts” and what action could the trustee take ?

Thanks


FYI. Just got a letter from one of my creditors that wants to settle for 65 cents on the dollar. I haven't had any communication with this creditor. Totally unsolicited.

[keepmine]

Nothing in the code says you can't give or receive gifts. Many people help support aging parents or adult children. The key is, you stopped when you saw the inevitable. I don't see any issues.
Good job on the multiple consutations. Why anyone would object to someone taking notes is beyond me. Getting other points of view is just a good business pratice. Sounds like that lawyer has some maturity issues.