filing in iowa: a question about exemptions

[iowanintrouble]

i am filing chap 7 very soon: i owe back dated child support - my ex is aware of this and is understanding due to job problems etc. cs recovery has started witholding on my wage from my employer. my lawyer tells me the trustee can sell my exempt property such as musical instruments (i am a part time music teacher) and my computer to pay this off. can this be so?

[derf]

Exemptions are exemptions in Bankruptcy. Meaning just that. They are exempt from your bankruptcy procedings.

Chapter 7 does allow some protection of personal property, even under the new laws - be it federal or state.

However,

There is a 30 day time period begining right after your 341 Meeting in which any creditors can object to your exemptions to try and get money to pay your debts.

This rarely happens except in cases where fraud or abuse is suspected. If a creditor does object to your exemptions, the issue will be brought before the Trustee and likely a Bankruptcy Judge to determine the validity of the objection.


Be clear though- Child Support can NOT be included in Chapter 7. - Meaning that you will still have your obligations there.

I would highly reccomend that if you are only employed part time, that you buckle down and get another job or a different full time job so that you can better meet your child support obligations.

It may turn your chapter 7 into a chapter 13, however, under the new law that is more likely to happen anyway; but you and your kids would at least be in a better place that way. Any remaining debt can either be repaid via a court approved re-payment plan over an average of 5 years, or yoy may still be able to qualify for a Chapter 7 in which your debt is erased.

Since you did not tell us anything further about your work/income/expenses, etc. It's a little harder to give you specific advice here.

[StaciMM]

Each state allows you to exempt certain amounts and types of assets, meaning they would be yours to keep in a bankruptcy. If your possessions exceed those exemptions, the excess amount would be taken and distributed to your creditors. Child support-I think-would take higher priority over other debts.

Bankruptcy will not discharge your child support-you will still owe it after your case is over.

From bankruptcyinformation.com, Iowa has the following exemptions (I don't know if these are up to date):

$2000 total in Appliances, furnishings, and household goods
$1000 total in Books, Portraits, and Paintings
$1000 total in Clothing
$5000 total in Motor Vehicle, Musical Instruments, and Tax Refund (limited to $1000 of that being in tax refund)
$100 Wild Card for any property, including Cash
Then some others items that do not list a value: a firearm, wedding or engagement rings, health aids

[iowanintrouble]

thanks for the replies. i fully intend to pay the past due CS and do not expect it to be wiped off in my chapter 7. i actually have a full time job now as a temp (is that a contradiction?) and use my guitar teaching now as a top up - i make an averedge of $32000 a year. i have seen a lawyer and am proceeding with my chapter 7 - i think i'm filing on sat. i was just very worried as he said the trustee would take all my exempt property, like my guitars - very cheap guitars, 1 worth roundabout $250 the other basically worthless (i use these to teach), and my TV (4 years old sony) and my computer. i do totally trust the atty but just need reassurance as i feel so sick because of this mess.....
the CSrecovery just started garnishing my wages - 511 a month - so i am hoping that will keep the dogs at bay. i made many stupid mistakes after my divorce and just want a fresh start - credit cardless of course!!

[StaciMM]

#1. Your paperwork should not be filed until you review and sign off on a final copy. It should have your possessions listed on schedule B, and exemptions listed on schedule C. If things are not correct/complete-insist on corrections. You can amend later, but it may look to the trustee that you are hiding things or being misleading.

#2. Have you paid this attorney anything? It bothers me that he told you the trustee would take your exempt property. Perhaps there was a misunderstanding, though I can't imagine how. The exemptions for your state seem fairly reasonable, and based on what you posted there should not be an issue.

If you have not paid yet, consult with another attorney. It is best to meet with 2-3, ask questions, and get a feel for them. If they don't know basics, how can you expect them to represent you well? Only file with someone you are 100% confident in.