Need help please reply ASAP

[sunzhu35]

Hey this is Sid I posted about 4-5 days back stating i was looking at bankruptcy as an option for my parents and based on what reply i got i went ahead and saw an attorney and personally i have been reasearching bankruptcy the whole weekened and so based on that i have come up with some concerns. Now that I have some more information i got some specific question that i have to ask you guys.

My parents debt:-

bank of america CC 7k - mom
bank of america loan 10k -mom
chase cc 7.5k - mom
amex cc 6.5k - mom
discover cc - 7k - mom
chase cc - 12k - dad

We are a family of 4. mom works fulltime and so does my father but on medical leave( he has lung cancer and has at most a year to live) till december, my brother has a part time job and a student, i have my own small business(right now incurring losses) and have a part time job. we are a zero asset family 1 house, 2 car family. given all that my goal is to discharge of all my parent's debts.

With my father's income and my business profits we were able to pay all our debts. but my dad has been been on leave for 3 months so no money coming in right now from my fathers, i had a loss in my business and my mom is the only stable earner. We have been living off(at least partially) of our credit car for the last 3-9 months for the above stated reasons and now we owe $53k in total including last week's personal loan. But without my father's income and my business incurring losses we can't pay zilch, barely covering minimum right now but soon that'll be over too. my goal is to have all of my parents' debts discharged.

My father qualifies for Hill-Burton program which is a federal program for people without insurance. And according to our estimation we will owe from 3k-5k in debts... so it's good except their hospital care sucks so bad. So I'm not concerned about that healthcare costs ...unless some1 knows more than me about unforseen cost of healthcare which i am not aware of.

question#1 issue is the matter of the 10k personal check loan that my mother took out on seventh of march of this year, and it seems to me that might be a problem. My mom took out the loan to pay off a secured debt (the last secured debt that we have) of $1k, buying a truck for my bother for work purpose ($1k-$2k), pay a personal debt to a friend(1k), and doing some needed work on the house. now the thing is according to our calculation we will have $3k left after doing all the things I listed. now when we go to bankruptcy what do we do with that money, do we keep them in cash in hand, cuz we didn't put it in the bank. and wait six months and file for bankruptcy. I wanna keep the money cuz with my father dying off, and with bills and so much debt there's no security money for us anymore, hopefullly my business will pick up and i actually have a part time job which I didn't mention at first. so what can i do with the money--- buy jewelery? give it as a gift to a friend or my brother? then wait for 6 months then file bankruptcy? what are my options here?

question#2 the personal check is from bank of america with whom my mother has a credit card and she owes them 7k on the credit card so in total we will owe them 17k is that big enough number for bank of america to object to... what are the possible scenarios.

question#3 my mother being more frugal then mr. Burns she saved up some money about $3k cash in hand, from selling my old car to any money that we get in hand, and leftovers from my brother cashed paycheck. so how can i protect that money. and also if i have never put that money in bank how come the trustee will ever know about it(since they are from many miscellaneous sources and personal business done in cash.)

question#4 Th lawyer who i saw today said that when our bank account hits $0 then we file for bankruptcy, i a thinking is that necessary. we only have 300 bucks in it anyway.

question#5 what's the best way to look for lawyers and how would some of the experienced members here look for a lawyer. any websites or organizations out there where i could get lawyer recommendations, i'm looking especially for a record of win/loss ratio of lawyers.

so basically my plan is get money under some of the exemptions
and keep existing cash in hand and file at the end of this year. we gotta live like somalians but we'll make it thru. Do you guys think that's a sensible plan and if not what are the pitfalls and what should be my plan of action.


kinda desperate here plz reply.

[keepmine]

With only 1 person working fulltime and trying to support 4 people plus, dealing with a major illness, I think you'll find any excess money will be spent on necessary living expenses.
She'll likely need to make a few minimum payments to BOA and then wait as close to a year as possible before filing.

[sunzhu35]

Why a year? i thought they look back to that last 6 months. And if say she makes 5 payments and waits for a year, what happens for the rest 7 months? wouldn't we get in trouble of some kind for not paying for that 7 month period.

I am switching to full time where i work right now and so is my brother, i wanna save as much money as possible in aniticipation of my father's death, we are cutting costs everywhere streamlining to only the most basic necessary things. Dad's health debt will be coverable by us, because i have seen myself how this program operates, for ct scan we had to pay $50 bucks!!! and we got info on this program from a friend of mine, he's been going to the same hospital for 2 year and he gets billed for 10-20 bucks.

But the problem is if we save up we gotta give it up come BK time and hence my apprehension.

Also, i was wandering if there's any change in BK laws anytime this year when will it come into effect? next year hopefully.

[Flamingo]

As to your question on how to find an attorney. I highly suggest you call your State Bar Association and ask for a BK attorney in your area or nearest major city. Most give free initiali consultations. Call and make an appointment for your mother and father (you should go along also) and take with you a complete listing of all debts, monthly payments, sources of income, paystubs, assets, bank accounts and the latest tax returns. The attorney will give you all the advice you will need as to what you can and cannot do as to your current situation. Then you will know what needs to be done. Best of luck to you

[keepmine]

Your problem will not be the trustee looking back-it'll be BOA if the file an objection. Your mother needs to show some effort to repay for a few months to show this wasn't an attempt to borrow money without repaying. For $17K, they may well file an objection. You stop paying after a few months and the only trouble will be collection activity. It's not illegal not to pay your debts.
As to giving up excess cash in a bk-that's the price of admission to the bk club. Best thing to do is either convert it to assets that are exempt like an IRA or, spend it on living expenses. One suggestion is, quit comingling money. You and your brother should each have a bank acount and chip in on the bills by writing checks. Your mother should not hold any of your money if bk is in the cards.

[sunzhu35]

First I can't thank you guys enough for trying to help us out, 2nd if I can make it up to me I'll give u guys free towing service if u guys live in the dallas fort worth area as a sort of thank you(the best i could think of).

I was also thinking BOA will probably object to 17k, just hoping that the cost for them is too much for the reward. I guess i'll just say they are not home when the collector cal(lol).

I understand that unless it' worthed, the creditors don't object, given they will get 50% of the debt amount not the whole pie. Given that what is the minimum amount of the debt have to be for a given creditor to object to.

If we have cash in hand how will any1 know if we actually have anything. I mean say instead of putting our paycheck to our bank accounts if we cash them and buy stuffs
how will any1 know how much we have at hand.

So does this make sense.... from now on my mother's paycheck gets sent to her bank account and we spend her check first... and all the rest of the money that we have in hand(3k) and any additional savings that we have gets sent to my brother's account( and that includes any left over money from the loan my mother took)


During the BK process will they investigate me and my brother's finances?

man i have too many questions in mind so I'll go one after the other. therefore please bear with my lack of knowledge concerning bankruptcy and I truly appreciate ur help.

[MajorMike]

Do you have life insurance on your dad you'll be able to collect once he has passed?
Can you avoid BK by paying off that debt so your mom won't have to worry about herself and you kids?
I know my parents have TONS of life insurance but the thing is, we're all grown and don't need it. We'd just be happy to pay their funerals off and their cars ( they don't have any other debt ) and be done with it.

You don't have to wait a year either. 90 days is good enough. Make 3 payments and you'll be fine. Don't think BOA won't pursue a 17K loan either. I'm being pursued by Amex for a measily 6K...because I didn't wait the 90 days like I should have.

DO NOT conceal money because, yes your mother could get caught for concealing assets!!!
Keep the cash at home under a mattress, or buy money orders with it but use it to pay bills or use it for an exemption. Pay the utilities with it and keep receipts for EVERYTHING! Since it will be a Chapter 7, your mom could get questioned on a lot of things. Make sure you have all your ducks in a row. You REALLY NEED TO SEE A FEW BK ATTORNEYS BECAUSE YOU HAVE SO MANY VARIABLES.

[PaKettle]

Hey this is Sid I posted about 4-5 days back stating i was looking at bankruptcy as an option for my parents and based on what reply i got i went ahead and saw an attorney and personally i have been reasearching bankruptcy the whole weekened and so based on that i have come up with some concerns. Now that I have some more information i got some specific question that i have to ask you guys.

My parents debt:-

bank of america CC 7k - mom
bank of america loan 10k -mom
chase cc 7.5k - mom
amex cc 6.5k - mom
discover cc - 7k - mom
chase cc - 12k - dad

We are a family of 4. mom works fulltime and so does my father but on medical leave( he has lung cancer and has at most a year to live) till december, my brother has a part time job and a student, i have my own small business(right now incurring losses) and have a part time job. we are a zero asset family 1 house, 2 car family. given all that my goal is to discharge of all my parent's debts.

With my father's income and my business profits we were able to pay all our debts. but my dad has been been on leave for 3 months so no money coming in right now from my fathers, i had a loss in my business and my mom is the only stable earner. We have been living off(at least partially) of our credit car for the last 3-9 months for the above stated reasons and now we owe $53k in total including last week's personal loan. But without my father's income and my business incurring losses we can't pay zilch, barely covering minimum right now but soon that'll be over too. my goal is to have all of my parents' debts discharged.

My father qualifies for Hill-Burton program which is a federal program for people without insurance. And according to our estimation we will owe from 3k-5k in debts... so it's good except their hospital care sucks so bad. So I'm not concerned about that healthcare costs ...unless some1 knows more than me about unforseen cost of healthcare which i am not aware of.

question#1 issue is the matter of the 10k personal check loan that my mother took out on seventh of march of this year, and it seems to me that might be a problem. My mom took out the loan to pay off a secured debt (the last secured debt that we have) of $1k, buying a truck for my bother for work purpose ($1k-$2k), pay a personal debt to a friend(1k), and doing some needed work on the house. now the thing is according to our calculation we will have $3k left after doing all the things I listed. now when we go to bankruptcy what do we do with that money, do we keep them in cash in hand, cuz we didn't put it in the bank. and wait six months and file for bankruptcy. I wanna keep the money cuz with my father dying off, and with bills and so much debt there's no security money for us anymore, hopefullly my business will pick up and i actually have a part time job which I didn't mention at first. so what can i do with the money--- buy jewelery? give it as a gift to a friend or my brother? then wait for 6 months then file bankruptcy? what are my options here?

First of all, see if you have enough exemptions in your state to exempt the cash. That way your parents could keep it. ...

Otherwise, spend it on NECESSARY things: home repair, dentists, doctors, clothes or tools you need, etc... You could probably save $1500 or so of it for paying her bankruptcy attorney.

question#2 the personal check is from bank of america with whom my mother has a credit card and she owes them 7k on the credit card so in total we will owe them 17k is that big enough number for bank of america to object to... what are the possible scenarios.

The only thing you need to worry about here is an objection from BofA. They could say your mom took the money KNOWING she could not pay it back, or knowing she planned to file bankruptcy. So that is a problem. You need to put at LEAST 6 months in between that loan and filing bankruptcy and make at least 3-4 payments on it. To be REALLY safe, she should wait closer to a year before filing. How long to wait is just a guessing game, and the more time she waits the better chance she has of their not objecting. IF they object, they would probably want at least half of that personal loan back over a period of one year. It would not affect the rest of your debts or your bankruptcy discharge, it would just mean she might pay back 1/2 to that one debtor. As to whether she would pay half of the TOTAL owed or just half of that last loan, I'm not sure. Seems like it would be just half of that last loan, but maybe someone can answer that more confidently than me.

question#3 my mother being more frugal then Mr. Burns she saved up some money about $3k cash in hand, from selling my old car to any money that we get in hand, and leftovers from my brother cashed paycheck. so how can i protect that money. and also if i have never put that money in bank how come the trustee will ever know about it(since they are from many miscellaneous sources and personal business done in cash.)

If you can show that money is not your mother's but rather it is your's and your brother's, then no problem. You might get questioned on it so you'd need to SHOW that the money came from you and is your's, not her's. If the money has been saved in a cookie jar and there is no paper trail, then no one will know about it anyway. Of course, you are supposed to report any cash on hand, so it would be wrong not to report it.

question#4 Th lawyer who i saw today said that when our bank account hits $0 then we file for bankruptcy, i a thinking is that necessary. we only have 300 bucks in it anyway.

This depends on your state and district. Some trustees want EVERY DOLLAR they can get their hands on and if you cannot exempt the money in your checking account on the day of filing, then they can take it. So ask about exemptions in regard to this. The attorney you spoke with may be correct in having the account at zero when filing.

question#5 what's the best way to look for lawyers and how would some of the experienced members here look for a lawyer. any websites or organizations out there where i could get lawyer recommendations, i'm looking especially for a record of win/loss ratio of lawyers.

Most attorneys "win" the bankruptcy cases, it's not really a matter of presenting a case and arguing for it as in other areas of law. It's based on numbers for the most part and if your profile fits the numbers (means test) then you will most likely be Discharged unless you conceal lie or cheat.

The only areas of possible problems here are whether you qualify for a 7 or not based on your income and expenses. If you are close to the borderline then you might get thrown into a Ch. 13 instead. The only other area of (possible) doubt is if you get Objections from a creditor as discussed above. Generally if you have 6 months plus between the debt and the filing of bk then you are less likely to get an objection. The closer to a year you get, with more payments to that creditor, the less likely they can win an objection.

As to choosing an attorney, there is a sticky on that at the top of this or the General Bankruptcy forum I believe. I recommend the site www.nacba.com, and there is another one that has gotten some good reviews as to representing competent attorneys. What you want is an attorney that does a lot of bankruptcies - say, 25-75 a year? - and does mostly only bankruptcies. You don't want a "mill" that does 500 a year... Do a search here on that subject for many more suggestions.

Here's a thread about what to ask the attorneys at your consultation:

http://www.bkforum.com/showthread.php?t=21810

so basically my plan is get money under some of the exemptions
and keep existing cash in hand and file at the end of this year. we gotta live like somalians but we'll make it thru. Do you guys think that's a sensible plan and if not what are the pitfalls and what should be my plan of action.


kinda desperate here plz reply.

Sounds like a reasonable plan. If you could wait til Dec. that would put 9 months between the BofA loan and the filing, which might be enough if she makes 4-5-6 payments. Do keep track of all your expenditures and don't mix your accounts up, each member of your family - especially your parents - should keep receipts on all income and expenses and don't go transferring money in and out of other family members accounts, not even cash, without a record of it and what it was for.

[danaf]

"So does this make sense.... from now on my mother's paycheck gets sent to her bank account and we spend her check first... and all the rest of the money that we have in hand(3k) and any additional savings that we have gets sent to my brother's account( and that includes any left over money from the loan my mother took)"

If the brother's account you are putting extra money into is part of the household where you will be declaring bk - don't! Any extra cash on hand, keep as cash on hand. Use envelopes or something for savings purposes. Once you put it into any bank account it is traceable and you must report is as combined income if doing ch 7.

[sunzhu35]

We live in dallas, texas btw

here's another question circling in my head.

We have 2 cars with title in my mom's name, and we also have a 3rd car that my bro is paying monthly but my mom is a cosigner. Now when my brother buys a truck, I think the best thing to do would be put that truck in my brother's name since during BK process they will find that we spent part of the loan money on truck they would want it back if it is in my mom's name. Am i right to think that, if not what could i do to protect the truck(it is going to used for business, so maybe my mother could show it as a business tool).


U guys are the best.

[keepmine]

If the brother's account you are putting extra money into is part of the household where you will be declaring bk - don't! Any extra cash on hand, keep as cash on hand. Use envelopes or something for savings purposes. Once you put it into any bank account it is traceable and you must report is as combined income if doing ch 7.


Cash on hand is not income.
I think the simple thing to do is just bifurcate the finances. Everyone has their own bank account. Mom pays the bills until she runs out money and then, the brothers step in and make up the shortfall. Nothing wrong with helping out with household expenses.
If you're determined to try and hide money from the trustee, just keep it in cash. No need in developing a paper trail.
I still think you are underestimating the amount of money you'll have on hand. I don't care what sort of medical plan you have. A terminally ill person is going to get expensive in a hurry. The entire execrise {hiding money} is going to be moot in about 6 months. Your mother is going to have a lot of legimate expenses to spend that nestegg on.

[sunzhu35]

I still think you are underestimating the amount of money you'll have on hand. I don't care what sort of medical plan you have. A terminally ill person is going to get expensive in a hurry. The entire execrise {hiding money} is going to be moot in about 6 months. Your mother is going to have a lot of legimate expenses to spend that nestegg on.

well u might very well be right, and most probably u r. The reason i'm getting all the info now is to make sure all coast is clear, what if if this program seems to actually work and i have a glut of money in hand, then! we gotta have a backup plan to meet that scenario and hence my reasearching in bankruptcy.

[keepmine]

We live in dallas, texas btw

here's another question circling in my head.

We have 2 cars with title in my mom's name, and we also have a 3rd car that my bro is paying monthly but my mom is a cosigner. Now when my brother buys a truck, I think the best thing to do would be put that truck in my brother's name since during BK process they will find that we spent part of the loan money on truck they would want it back if it is in my mom's name. Am i right to think that, if not what could i do to protect the truck(it is going to used for business, so maybe my mother could show it as a business tool).


U guys are the best.

I'd suggest you and your brother start buying and financing your own stuff and leave your mother out of it. She has enough on her mind right now.
BTW, have you talked with them about filing bk?

[sunzhu35]

here's a stupid question. if I live in my mother's house for the last 3 years (but probably moving to an apartment near college after my dad passes away) and i have filed my taxes as a single. now legally am i a part of this household? my brother(18 yr.) filed his taxes as a dependent and lives here so obviously leagally he is a member of this household.

[sunzhu35]

BTW, have you talked with them about filing bk?

No not yet, they'll flip, they are old school indian folks, bankruptcy is something that is almost taboo. for them it's too complicated, too much hassle, embarassing, plus they are paranoid as hell. my folks are under the impression that we will work real hard and take 2nd jobs and pay off all this off. problem is the way i see it that will take more than my lifetime, me and my brother is not staying here indefinitely and we have our own plate full as it is. I partly own a towing service company but due to accidents, rundown trucks, gas price, new acquisition i don't have any money, part student, have part time job. my mom says to quit the business(business is too much stress/risk for my folks), and get a full time job which i don't wanna( i only have an associate degree = no good job) . my bro is a student and has a part time job will be fulltime next month. i have about zero consumption except food which i pay myself. but my bro depends on my folks. I moved back 3 years back to take care of all the big stuff(i still drive them around) in the family (me being the eldest and americanized) and therefore this is something that i also have to push.

BTW if cash on hand is not income how does it effect BK process.
Stupid question again - if i can keep cash in hand i think that doesn't include loan money and/or cash advance since they are tracable. am i right?

and is cash advance treated differently then straight credit card usage? becuz some of our credit card debt includes cash advance in them.