Help! I'm new to this and have lots of questions about CA Ch7

[dannymac]

Hi guys,

I'm 23 years old and possibly looking at getting sued well into the five figures on a frivolous claim. A business partner gone bad doesn't want to play by the rules, and since he has tons of money, I may lose my rightful case if he takes me to court.

That being said, I'd like to ask about Chapter 7 BK. I live in California and I rent the home where I live, and I'll be effectively unemployed if this guy sues me, or, if I'm not, I'll be making less than $30K a year at the time.

My biggest question is about my personal property, assets, and exemptions. Here is a list of the large-ticket single items of my personal property, in order of current value:

Car: $3500
Digital Piano: $1800 (I will never give this up, EVER)
Desktop PC: $1000
Assorted Video games: $1000
Laptop PC: $800
Plasma TV: $500 (seriously, I got a good deal on it)
Clothing: $500
DVDs: $500

I also have between $2000-7000 in securities (trust fund(s), stocks, bonds, mutual funds) that are held in executorship by my father until I'm 25.

I basically want to know if all the above items would be protected. I wouldn't be filing for quite some time, perhaps not until the fall. Hopefully, I won't get sued, and won't lose. But I'm trying to plan for the worst. It would really suck if I have to claim BK, as the only debt I have is a current (though maxed-out) $2000 Visa.

A couple of general questions:

-Does a BK affect your banks policies, such as making funds available when they're deposited, or issuing you a Visa check card? (I'd be changing banks if I claimed BK)

-How negatively will a BK affect future employment opportunities, or receiving student financial aid (non loan)?

-How long should I realistically expect the negative effects of a BK to last before I can be considered a normal credit risk, and able to finance a car, house, etc?

-How hard will a BK affect other credit check-required things like utilities, cellphones, cable, etc?

Sorry I have so many questions. I feel overwhelmed right now, but am trying to take measured steps to protect myself and my property. Thanks for any advice, I really appreciate it!

[keepmine]

Ca. lets you keep a lot of stuff.

http://www.thebankruptcysite.com/bankruptcy-exemptions/california.php

Most bk lawyers will give a free initial consultation. Talk with a few and get all of your options explained.
If you need a new bank, the time to take care of that is before any negatives show on your creidt reports.

[anonymuse]

Your values might be on the high side.

How many DVDs do you have? I can't find the link right now, but Goodwill or other places have approximate values of items like this. ItsDeductible, that comes with TurboTax, also has lists based on eBay sales.

You need to consider the garage sale/thrift store/ebay price for something of similar age and condition.

Also, not sure what the work you do is, and sometimes things can fit into a business category.

[aa06a47]

Revising your items to garage sale prices on your personal belongings, (like the computer is probably only $200) you will probably keep everything. You may lose the stocks/bonds/mutual funds though. You need to see if the trust is a spendthrift trust. If so, the creditors cannot touch it if the truste is set up correctly.

OK to try and answer some of your questions....

-Does a BK affect your banks policies, such as making funds available when they're deposited, or issuing you a Visa check card? (I'd be changing banks if I claimed BK) Shouldn't, but might vary from bank to bank. If you chose to file BK, then you should open an account either right before or the day after filing. I did mine the day before filing. The bank does a quick credit check before opening an account. I would definatly make sure I had no money in a bank if your BK on them for an amount of money, not because they are allowed to take it, but because sometimes they do, and it takes awhile to get it back

-How negatively will a BK affect future employment opportunities, or receiving student financial aid (non loan)? Employeers are not allowed to discrimate because someone filed BK. However, prooving they didn't hire you because of this is a different story. I have read and heard of many people on this thread getting jobs after filing. I have read of one who got fired after filing.....the student loan thing....don't know about them.

-How long should I realistically expect the negative effects of a BK to last before I can be considered a normal credit risk, and able to finance a car, house, etc? Usually, they say 2 years of good pay history and you can qualify for a home at the normal interest rates, some places will actually sell you a car the day after you bk is discharged, though your interest rate will be high. A chapter 7 will stay on your credit report for 10 years. That doesn't mean though you can't buy a house or cars in that 10 years.

-How hard will a BK affect other credit check-required things like utilities, cellphones, cable, etc? Depends on the utility/cable/ect. If you already have service with them, they will probably not check your credit if your moving services. If I were you, make every attempt to keep your utility bills current.

Sorry I have so many questions. I feel overwhelmed right now, but am trying to take measured steps to protect myself and my property. Thanks for any advice, I really appreciate it! We have all been where your at, don't worry, that is what the board is for.

[lrprn]

[edit]
-How negatively will a BK affect....receiving student financial aid (non loan)? .....the student loan thing....don't know about them.

[dannymac]

Wow. Thanks for all the great advice so far. Hopefully, it won't come to filing bankruptcy. As far as the values for my stuff... If I DO want to file bankruptcy, how do they determine the value of my things? Do I just declare the value and they believe me? Or does some creep come out to my house and pick through my stuff? I hope these aren't dumb questions, but like I said, I'm new to this stuff. Thanks again. I'll be talking with an attorney about this stuff for free soon. I just got Pre-Paid legal. They won't file for me, but they'll consult me as much as I want.

[keepmine]

Nobody will come to your house. 2nd hand consumer goods have little value. Think garage sale values or, look at prices of similar products at thrift stores or pawn shops.

[anonymuse]

Wow. Thanks for all the great advice so far. Hopefully, it won't come to filing bankruptcy. As far as the values for my stuff... If I DO want to file bankruptcy, how do they determine the value of my things? Do I just declare the value and they believe me? Or does some creep come out to my house and pick through my stuff? I hope these aren't dumb questions, but like I said, I'm new to this stuff. Thanks again. I'll be talking with an attorney about this stuff for free soon. I just got Pre-Paid legal. They won't file for me, but they'll consult me as much as I want.

Just make a note for the items where you got the figure from. For me, for some less common items, I've found them on eBay and printed out the item in case I'm questioned.

On the schedule, clump things together for costs--you don't need to itemize every single thing. However, have the back-up paperwork for your 341 meeting to say how you arrived at the figures and any documentation you have for substantiating your claim.

For you piano, you might want to spend the couple dollars for a search on http://www.orionbluebook.com/ since it might be hard to find something equivalent at FMV prices.
h

[dannymac]

Well, if I sold my piano on ebay, I know it would list for $1700-1800. People do sell that make and model on eBay from time to time, and they usually don't come with both expansion packs.

With the Plasma TV, here's the kicker: I bought it at WalMart for $500 because it had a scratch on the screen, and didn't come with the stand or remote. Even though I bought it at a retail store for that price, it would list for much more on eBay. So what is the real value? If you take in to account depreciation from the retail price I paid for it, it would be like...$450 or something.

It seems as if the values from Pawn Shops or used movie stores are the way to go, since they give you very low amounts, say $5 for a movie they turn around and sell for $12.

If I'm unemployed when I file Ch7, can I keep securities and other cash assets, since I may need them to stay afloat while I look for another job? Can I claim them as income in any way (and, indeed, I have used it as income many times in the past)?

Also, if you get discharged, can you claim bankruptcy again and again? Not that I would do this, but I'm just wondering. Thanks again, guys!

[keepmine]

You won't be able to keep cash or securities beyond what you state may exempt. Nothing says you can't liquidate the securities and use the cash for ordinary living expenses prior to filing or, to pay your legal fees.
You may file a Chapter 7 every 8 years.

[aa06a47]

Well, if I sold my piano on ebay, I know it would list for $1700-1800. People do sell that make and model on eBay from time to time, and they usually don't come with both expansion packs.

With the Plasma TV, here's the kicker: I bought it at WalMart for $500 because it had a scratch on the screen, and didn't come with the stand or remote. Even though I bought it at a retail store for that price, it would list for much more on eBay. So what is the real value? If you take in to account depreciation from the retail price I paid for it, it would be like...$450 or something.

It seems as if the values from Pawn Shops or used movie stores are the way to go, since they give you very low amounts, say $5 for a movie they turn around and sell for $12.

If I'm unemployed when I file Ch7, can I keep securities and other cash assets, since I may need them to stay afloat while I look for another job? Can I claim them as income in any way (and, indeed, I have used it as income many times in the past)?

Also, if you get discharged, can you claim bankruptcy again and again? Not that I would do this, but I'm just wondering. Thanks again, guys!

Your plasma tv is damaged and would probably bring only 2-300 bucks at a yard sale. Your movies are worth about 2 bucks a piece. What value you give them won't really matter as long as you stay below your states exemptions. I haven't looked at CA exemptions, but someone already posted they are pretty liberal.

You can turn the securities into cash (I would do this 6 months before you think your going to file). Securities are an asset the trustee will take. In all reality, you will need to "hide" the cash to keep it. I really don't have any "legal" ideas on how to do it. I do know you will stand a bigger chance of getting caught hiding it if you take it out just a few days before going BK.

You can declare bankruptcy every 8 years if you need to.