New here, need advice

[willsurvive]

Hi,

I've been reading for the last few weeks and would like to jump right in, and hope to contribute when I become more knowledgeable. Anyway, here's a little background about me:

Filing CH 7 in the next few weeks after a failed business. Hoping discharge close to 100,000 debt (including subcontractors, business debt, cc debt incurred because of business, and medical bills). We are keeping our home (but not reaffirming it's Countrywide) and 1 vehicle. We have already given up one vehicle this week due to our lawyer's advice. A couple of questions:

1) We have $800 wildcard exemption per debtor in Idaho for a total of $1,600. We have a snowmobile that my husband is insisting on keeping and worth around $1,200. Will we be able to use the wildcard for this? Also, while talking to a not very knowledgeable paralegal at our attorney's office (she even said this) she said our digital camera and sporting equipment like bikes, weight lifting stuff would have to be under the wildcard. Does this sound right?

2) We also have a wrecked and totalled snowmobile. We paid $2000 for it, but now it is only worth maybe $400-$500 max. It is not driveable at all. Will the trustee want this? It seriously needs $1,500 worth of repair to get it running.

3) The paralegal told me to close our personal checking account before filing. I told her there was NO debt associated with that account, so why should I close it? She didn't have a good reason, she just said we can get a new one. Does this sound right? I don't want to go to the bother if it's not necessary. Also, she said to not have more than $200 in the account the day we file.

4) I own an online business and receive payments via paypal. How is this going to work on the day we file? I could receive payments on that day and not sure about that. Any insight?

5) What things will be okay to buy right before we file. Meaning, we will have excess money because my husband is getting paid a week before we file. Can we buy groceries or what? And how much is too much? We are going to make sure our utilities are caught up but other than that what else can we do?

Thank you so much, I really appreciate the help and knowing we are'nt the only ones going through a rough time.

[JRScott]

Hi,

I've been reading for the last few weeks and would like to jump right in, and hope to contribute when I become more knowledgeable. Anyway, here's a little background about me:

Filing CH 7 in the next few weeks after a failed business. Hoping discharge close to 100,000 debt (including subcontractors, business debt, cc debt incurred because of business, and medical bills). We are keeping our home (but not reaffirming it's Countrywide) and 1 vehicle. We have already given up one vehicle this week due to our lawyer's advice. A couple of questions:

1) We have $800 wildcard exemption per debtor in Idaho for a total of $1,600. We have a snowmobile that my husband is insisting on keeping and worth around $1,200. Will we be able to use the wildcard for this? Also, while talking to a not very knowledgeable paralegal at our attorney's office (she even said this) she said our digital camera and sporting equipment like bikes, weight lifting stuff would have to be under the wildcard. Does this sound right?

2) We also have a wrecked and totalled snowmobile. We paid $2000 for it, but now it is only worth maybe $400-$500 max. It is not driveable at all. Will the trustee want this? It seriously needs $1,500 worth of repair to get it running.

3) The paralegal told me to close our personal checking account before filing. I told her there was NO debt associated with that account, so why should I close it? She didn't have a good reason, she just said we can get a new one. Does this sound right? I don't want to go to the bother if it's not necessary. Also, she said to not have more than $200 in the account the day we file.

4) I own an online business and receive payments via paypal. How is this going to work on the day we file? I could receive payments on that day and not sure about that. Any insight?

5) What things will be okay to buy right before we file. Meaning, we will have excess money because my husband is getting paid a week before we file. Can we buy groceries or what? And how much is too much? We are going to make sure our utilities are caught up but other than that what else can we do?

Thank you so much, I really appreciate the help and knowing we are'nt the only ones going through a rough time.

1. Yes you could use the wildcard for a snowmobile. However the paralegal is correct if ID does not have another category for it you would need to use it to cover exercise equip, electronic devices (cameras, computers), and other things not covered by another exemption. My advice give up the snowmobile and save the other stuff.

2. I wouldn't exempt it using the wildcard. The trustee would send someone out to look at it and they'd appraise it. Depending on what they found they'd either surrender it to you or attempt to sell it. Generally stuff that doesn't run they don't try to auction, and perhaps later with some saving after bk you can fix this one up.

3. Do you have any credit cards or loans at the bank where the account is? If so there are cross collateralization clauses often that can put the account in jeopardy.

4. Save some of the wildcard to help exempt this.

5. Food is acceptable. If its been a while since you had the car serviced take it in for an oil change and tune up. Eye or Dental check ups are generally acceptable.

[epiphany]

I agree with JR on most counts.

Except, however, that if you do own an online business that is on the up and up (ie, you include it when you file taxes), you should be able to claim your digital camera if you use it for business, and any other electronic items used for that business as tools of the trade if you haven't already maxed out that expemtion.

I also have to wonder if you have placed a realistic value on those snowmobiles, especially the one that is not running. Could it be that a totaled, non-running snow mobile is worth zilch, nada, nothing? I would think at least that it wouldn't be worth the value you have placed on it.

We tend to overvalue our stuff all the time so you may want to take another look at your possessions and assign them realistic garage sale prices if you can.

Best of Luck,
ep

[willsurvive]

Thanks. Unfortunately, my dh is insistent on the one sled. I don't care as long as we are able to keep it and my digital camera too. The thing that is confusing is that we have a lot of his tools that we are trying to exempt under the tools of trade as well. I use my camera and computer for my business. And he needs his tools in case he has to begin working on his own again (though we don't want that in this economy).
It's all so confusing!

[JRScott]

Sometimes sacrifices have to be made. Perhaps sit down and pray together about which is the better option. I think its much better to let the sled go than to lose something that could affect either of your incomes.

(However if he's claiming he's unemployed the Trustee might raise an eyebrow at him claiming his tools as tools of the trade....)