My BK and my fiancee's engagement ring

[bkfiler]

its 2006. girls should give the ring and cash award bonus now days. after all its the least they can do since we are taking them off the market, when no one else would have them, and now their pain is over.

[StaciMM]

Some would argue that the pain is just beginning...

its 2006. girls should give the ring and cash award bonus now days. after all its the least they can do since we are taking them off the market, when no one else would have them, and now their pain is over.

[StaciMM]

Art-I see what you mean regarding appreciation/depreciation. If Jim owned the ring now, that might be a valid arguement. Even so, claiming a really low value (considering in OH you only get to have $2000 TOTAL in personal proeprty) might look overly suspicious.

The question that will pose a problem, though, is: Have you transferred assets to family/friends in the past year (not sure about the time frame under new law)? The answer here is yes.

One last thought. Jim, are you & your fiance already living together, or have mingled accounts? If so, it might work to your advantage as it would become a bit of a gray area as to what was hers & what was yours.

[JimH]

Art,

I agree with you on the sale price. I know that I won't get full market value out of it if I try to sell it even though I did get it independently appraised and it turned out higher than I bought it for. If I take it to any jewelry store I'm sure they would probably give me $1,000 less than what I paid. I thought about putting it on ebay with an artifically high reserve price so I wouldn't actually have to sell it. Then I could use the highest bid as something to negociate with the trustee.

I think what Stacee is refering to is if I did it to intentionally defraud creditors, I would be liable for the full amount paid. It wasn't what I was doing but I'm sure it will look fishy. My agrument on that is if I intended to defraud creditors, I wouldn't of left a paper trail - after all I could of just taken the money out the out of the bank and bought it.

[JimH]

One last thought. Jim, are you & your fiance already living together, or have mingled accounts? If so, it might work to your advantage as it would become a bit of a gray area as to what was hers & what was yours.

No not living together or joint accounts - the real irony is I won't comingle money with her because she has bad credit.

[StaciMM]

Jim-

I don't think intent matters. When it is involves an 'insider' the trustee will probably not bother worrying about what you intended. He'll see dollar signs, unfortunately. Keep in mind that is how the trustee makes money!

One thing to consider, since you're planning to get married, you have issues now, and apparently so does she... Perhaps get married first and afterwards, file jointly. If she has 'bad credit' now, it would not be a 'clean slate' if you only address your own issues. And, attorneys fees & filing fees are the same for a single filing as it would be for joint.

[JimH]

Jim-

I don't think intent matters. When it is involves an 'insider' the trustee will probably not bother worrying about what you intended. He'll see dollar signs, unfortunately. Keep in mind that is how the trustee makes money!

One thing to consider, since you're planning to get married, you have issues now, and apparently so does she... Perhaps get married first and afterwards, file jointly. If she has 'bad credit' now, it would not be a 'clean slate' if you only address your own issues. And, attorneys fees & filing fees are the same for a single filing as it would be for joint.

Well the ring has to be saved come hell or high water - that's one thing I'm sure of through all of this.

I thought about getting married first but the timing favors right now. This is one of those times I can actually qualify for a ch 7 or a reasonably fair ch 13 under the new law. Under the means test at the wrong time, I might have to pay back $50,000 per year for 5 years - and that wouldn't even cover all the debt I owe (thanks to another persons bankruptcy). I've been struggling with this debt for three years now and I'm getting really tired of it. The new law takes away all of my incentive to even work - a marriage and six month vacation followed by a ch 7 makes alot more sense.

The only problem is I'm getting married in 97 days and have a couple good prospects that should start about then, which I don't want to throw away. If we marry first, then her income along with mine will factor into the equation - that could be even worse. It's almost a no brainer at this point - it's gotta happen ASAP.

[bkfiler]

yep. plan your bankruptcy. exaclty what ive been saying all along. good job.

wish i knew about that before i started.

[FoolAndHisMoney]

Art, I think the "replacement value" of assets pretty much applies to secured debts such as buying furniture on store credit. I can't imagine the courts claiming that all of a debtors assets are worth replacement value. If they do this then everyone will surrender their assets and the courts will look like a salvage yard.

Jim, you don't want to combine your future wife's income with yours. That may put you in a chapter 13 for sure, unless that's what you want. Not sure, but I think the means test is mostly for "consumer debts" such as credit cards, mortgages, cars, etc. Are your debts business related? Business debts and medical debts may not even require the test. Of course ask your lawyer about this.

It will be interesting to see how this plays out, but you may have to state under oath any anticipated increase or decrease in income in the months following your bankruptcy following. I guess they can "find out" from the IRS if anything changes with someone's income. I doubt they will place a monitor on someone to see if they get married after, but who knows.. LOL

[Genenco]

As per rule, in Ch 7, it's Garage Sale prices...Meaning $3500 would be $1200-$1700

Personally, hock shop gives 10-20% of value also...

[StaciMM]

Garage sale rules died on 10/16. New law is replacement value for assessing assets.

[FoolAndHisMoney]

Garage sale rules died on 10/16. New law is replacement value for assessing assets.

secured creditors since the Code now explicitly adopts retail value for most consumer personal property items."

[bkfiler]

lol, you guys dont think its going to really be like that do you?

your house is a secured debt. think it through. same goes for your stuff. you are going to have to match up what you have with what you can get it for. if you can get it, and where you gonna get it?

they are not gonna make you value it as a new purchase at best buy.

[JimH]

Not sure, but I think the means test is mostly for "consumer debts" such as credit cards, mortgages, cars, etc. Are your debts business related? Business debts and medical debts may not even require the test. Of course ask your lawyer about this.

It will be interesting to see how this plays out, but you may have to state under oath any anticipated increase or decrease in income in the months following your bankruptcy following. I guess they can "find out" from the IRS if anything changes with someone's income. I doubt they will place a monitor on someone to see if they get married after, but who knows.. LOL

This debt all is business debt - a $370,000 loss on a project over a two month period. The problem is the way I handled it and the creditor is going to strongly object to this as a business loss. The line of credit is a personal line - not in the company name. The proper way to keep it all business debt would of been to write a check from the LOC to the corp as a "loan from officer" on the books. Then repay the LOC from the corp as payments became due including interest.

What I did was suspend my salary and used the LOC to pay living expenses. I used up all the available resources in the company to pay the job loss. Once all of the company money was used up then I would loan money from the LOC to the corp as bills came due. Once the LOC was maxed out from the relatively small loans to the corp and the relatively large loans to myself I had to start getting real creative. I needed money from the corp again to live on. Instead of starting my salary again and paying taxes on it, I would take repayment from the corp on the loan and make the min payment on the LOC and use the rest to pay my living expenses. Once the loan to the corp was mostly repaid then I started my salary again.

In the end, the way I handled it managed to keep the taxes to a minimum but it appears a whole lot like consumer debt. Plus, on the corporate side, since I repaid the "loan from officer" ahead of other creditors without paying down the LOC, it appears like a preferential payment to an officer, which may open me up to personal liability to the creditors of the company that do not have a personal guarantee....not that it matters since I have to go bankrupt anyways.

Very complicated... At this point I really don't care to contest it as consumer debt because I think I'll pass the means test anyways. I don't want to pay an atty $175 an hour to go to the mat over it although I will if it's to my benefit.

[CindyLou]

get an appraisal and go from that. maybe you got a "bad deal" who knows.