New to this Worst Nightmare

[Inthestorm]

We're in GA. Saw atty. this week, thinking we could bk Dh's subcontractor business, which has about 60k of debt. No...we have to bk personal, too. OMG!!! We had not been told how many documents to bring, so we still don't know if we qualify for Ch. 7 or not. They are discouraging 13. The only payments we are behind on are home equity loan and land payment (sep. from current home) We are only behind as of Wednesday, 15th.

Is it possible to keep the home, but include equity loan in the bankruptcy?

IF we do file, do we need to do it NOW versus waiting a while longer to see if we can possibly sell something?????? (land, truck, horse trailer)

I am terrified that no one will rent to us with a Bk. I've already been told that! Dh is still working, but at a fraction of what is was during the "boom."

Should we consult with more than one atty. for any reason? We went to a large firm. The atty. that did all the figuring was super-quick and hard to follow and said he travels and we wouldn't see him again. However, I'm told this is the best firm in GA! The guy that started out helping us must have been just a paralegal and I think he was expecting a simple consumer Bk and didn't seem to have a clue.

I AM SO SO SO SO SO SCARED!!!!!!!!!!!!!!!!

[StartingOver08]

You should definately go to other attorneys for a consult. Sounds like this is a BK mill anyway - not a good situation when you have a small business and you are filing a personal BK. You need someone that is going to fight for you - and BK mills are not designed to do that. They are there to do the easy filings - and if they make a mistake on yours - so what it is no skin off their nose.

I would definately find a smaller firm with a knowledgable, experienced Bk attorney that WILL ATTEND THE 341 WITH YOU!

Yes, there is lots of paperwork. In fact, the two most important things about Bk is making sure the petition is right for you (not just the easy thing for the attorney to file). And the second most important thing is the 341 - if the petition is right, the 341 is smooth. Otherwise you have a problem.

This attorney has already said he is not going to the 341 (remember he said he travels alot?) - why would you want him to represent you in your BK?

[Inthestorm]

Good question, except that we'd be assigned to another one. The firm is *******, if you know anything about them. It was word of mouth that said they're the best.

We were thinking of simply surrendering our land, our current home and large truck. Why can't we do that without a bankruptcy? They're saying we could be sued. Is that really true? As you can see, we don't know what we're doing...

One more question about "surrendering", heard about Deed in lieu of foreclosure, but that can't be done if you have a second mortgage? Again, we're in GA.

[DownNotOut]

We were thinking of simply surrendering our land, our current home and large truck. Why can't we do that without a bankruptcy? They're saying we could be sued. Is that really true? As you can see, we don't know what we're doing...

Yes, that's true. They will sue you. If you surrender items outside of a BK, the lien holder will take possession of the property, sell it for what they can get and then sue you for the difference between what they got for it and what you owed them. This just happened to a very good friend of ours in GA with two trucks. We advised him to start consulting with bankruptcy attorneys.

[dingdong]

I know a lot of people are afraid that they will never be able to rent a home after BK.

That is simply not true. Although it may be a bit harder to find a home after BK, many LL, especially private ( not through a management co) are willing to overlook things if you provide a rational basis for your filing.

I think a lot of people don't understand what BK actually is. It doesn't mean you are absolutely broke. It basically means you have more going out ( bills) than you have coming in ( income), which equals insolvency.

When you BK your debt, you are taking all ( well most anyway) of the going out stuff and taking it away from the equation. That is one reason that so many members of this forum say-if you can't pay for the simple things in life before BK ( Housing, food, utilities, insurance) than you are most likely not going to be able to after and thus planning your BK at the right moment in time is important.

So after BK, you are going to be debt free, so your equation that you were looking at before suddenly becomes an "in the black" equation, instead of "in the red" and you are no longer insolvent. That debt that was dragging you down before is gone and you are able to make it financially.

If you present your case well to a future LL, you can make your case that you as a recently BK'd renter are better off financally than most other renters as you are now debt free and a large portion of your income is available for housing costs and necessities.

Also, you can point out that as a tenant , you cannot play the BK card for 8 years, so you can not use it as a defense in an eviction lawsuit, nor BK any back rent in case of failure to pay. You, in a knowledgable LL eyes are a much better risk as a probable tenant than someone who has never filed BK before.

When you look at all the risks/benefits, the recently BK'd are probably the best choice for tenants out there, risk wise for a LL.

Plus given the fact that you as a recent BK filer, probably rely on the necessity of having a stable home, you are less likely to want to move after finding suitable housing.

Point these issues out to a potential LL if they question your ability to be a long term , paying tenant and they may just see the light of day and rent to you.

Also, given the large number of recent foreclosures and BK filers, the demographics of the tenant pool are no longer the same anymore due to the economy, and LL's are definitely going to have to take into consideration the times we are in.

Personally, I had absolutely no problem renting with a BK as well as having the world's worst credit score. A few years ago, One LL I rented from, prior to my BK, pulled my credit and just asked for an explanation ( I had a lot of medical debt in collections) I explained and they were completely fine with it, didn't charge me anything extra deposit-wise and I had a lovely home in a nice neighborhood. I did have good references from previous LL and always took good care of the homes I rented.

Just wanted the ease your fears of renting after BK a bit, it is definitely not an end all to finding a decent home. You will be able to rent.

[Inthestorm]

Just to clarify a little...I'm thinking things are a little tougher for the self-employed??? I know they were when we were building, It required being in successful business longer than a regular employement and providing more documentation.

I have another question/issue. I know you're not supposed to "hide" assets. My "assets" are four-hooved babies, family members, aka horses. We're not talking registered, good bloodlines, talented, nothing like that. These are plain old mutt trail horses...but what if the trustee doesn't see it that way? Exemptions of $300 per animal isn't much...but things are so bad that horses are being given away these days! (Do trustees know that?) People are telling me I should move them and pretend they're gone or sold or given away, but I don't feel right about it...but...I'd rather live in a barn or warehouse than part with these "children!"

I can see the problem if you have a $30,000 champion blue-ribbon winner, but this is NOT the case!

What do you you think?

[dingdong]

List them as pets, with a low value.

I am a horse person too.


People are literally giving them away near where I live Hay is outrageous here in CA.

I don't think you will have to worry about the Trustee trying to sell them out from under you. Unless you have a winning racehorse earning money or a Grand Prix jumper or Dressage horse or a AQHA top cutting horse, you are probably fine.

Although ours are "priceless" in our eyes, if I offered my kiddos ex eventing horse for sale at 19 years old, I would have to pay someone to take her. Slightly arthritic and not 100% sound anymore- I think her value is in the negative given all her supplements we give her. ( But we love her like crazy none the less!)

They are more a liabilty than an asset these days.

[StartingOver08]

Just to clarify a little...I'm thinking things are a little tougher for the self-employed??? I know they were when we were building, It required being in successful business longer than a regular employement and providing more documentation. This is right. They will look at your documentation very carefully and you have to provide more information. I had to provide years of bank and credit card statments, mtgs etc. Get you documentation together, it is one of the most important aspects of actually having a successful Ch 7 when you have a small business.

I have another question/issue. I know you're not supposed to "hide" assets. My "assets" are four-hooved babies, family members, aka horses. We're not talking registered, good bloodlines, talented, nothing like that. These are plain old mutt trail horses...but what if the trustee doesn't see it that way? Exemptions of $300 per animal isn't much...but things are so bad that horses are being given away these days! (Do trustees know that?) People are telling me I should move them and pretend they're gone or sold or given away, but I don't feel right about it...but...I'd rather live in a barn or warehouse than part with these "children!" Do not move your horses or otherwise 'hide' them, do as dingdong says and put them on the petition as pets.

I can see the problem if you have a $30,000 champion blue-ribbon winner, but this is NOT the case!

What do you you think?

This is the scary part - trying to figure out what is going to happen. Just keep coming here and asking questions - we have BTDT and will help with what we can. My attorney's philosophy was 'bury the Trustee in documentation' and that worked for me.

[Inthestorm]

Does everything that happens boil down the the trustee? When we sat with the attorney telling him what we wanted to keep and he was calculating, is there any guarantee? Could the trustee mess all that around and do whatever he/she wanted and leave us with totally screwed lives (in our opinion)????

When we went in, we expected to only bankrupt the business. We were horrified to find that we could not. So in order for Dh to keep work truck and tools, I think that means our personal exemptions were even further reduced?

And uh..where does one come up with the money for rent? They usually require first, last and security. We have no -0- relatives to borrow from.

Yea, I'm not gonna be happy with this firm, glad we couldn't file that day. Too many unanswered questions, a lawyer that was nice, seemed competent, but VERY rushed and said bye bye never see you again but someone else will. NOT comforting!

One more Q: I seriously don't think there's any way in our case unless land and some other things sell (HA HA HA), but where is the best source of info on how to AVOID bankruptcy if there is ANY other way under the sun???

[StartingOver08]

The attorney you hire is your advocate. That is why you want a good attorney - because he is the ONLY one on your side (the debtors' side). Some people get bad or inexperienced attorney's and the attorney actually hurts their case or just lets the Trustee do what they feel like, so the most important decision is hiring the right attorney.

The Trustee represents the creditors. They are there to find assets to pay the creditors. Just so you know, the Trustee's get a commission on everything they find. So, if you are a no asset type of BK filing - the Trustee only gets about $60 for the entire case (it might be $65), but it is a nominal fee. So that Trustee is looking to make sure they find assets not only to pay the creditors but to increase their income too. The Trustee's are very, very experienced at looking for hidden assets.

As to rent: I am a Realtor and I work with people all the time with BK's on their report. Even people that are in the process of an eviction because they just filed Bk and were a month behind on their rent (because they had to pay the attorney fee). We negotiate all the time the rental deposits. It is not unusual to get in with first month and a small sec dep. You can save these funds after the filing date. If you work it out right, you can get in for no more than 2 mths rent. Sometimes much less. Just stay away from the large apt complexes and go to private owners. Use a good agent.

There are options to BK. But they may not be as 'clean' as BK is for you. By that I mean that in a BK you trump everyone - no one can come after you for the discharged debt. If you do it another way, settlement for example, you need to make sure to negotiate the debt, and negotiate what will happen with the remainder debt (you want to make sure it is not sold off to someone else for future collection attempts). You have IRS taxes to pay on the amount forgiven, unless you can prove insolvency to the IRS.

Don't get involved with a debt settlement company. If you are going to settle your debt, do it yourself. Debt settlement companys are a scam. Some scam you a little, most scam you a lot. If you want to know about debt settlement tips, check out www.creditinfocenter.com

[Flamingo]

Please do not list names of law firms in postings. The firm's name mentioned in this thread has been removed,.

[Inthestorm]

Sorry about mentioning the law firm.

Are trustees likely to go for animals that aren't worth much? These days people are giving them away...they are my "children" and I'm more worried about losing them than anything! I also think it's going to be WAY harder to find a place to rent where we can keep them. Oh the pain of it all!

[eddiep]

Inthestorm

You will be allowed a certain amount of exemptions, the amount is different in each state but you can chose what you want to keep like your horses. The whole "pet is an asset" thing blew my mind when I first heard it too. I have two dogs that I have to list. They will be at the top of my must keep assets list.

It was not clear in your posting why you are moving, do you own your home or do you rent? Either way I am not sure why you are moving.

My opinion on the lawyer situation is you should not be terrified to file after talking with your lawyer. You should interview a few more, and chose one that makes you feel more comfortable and confident. From what I have read here it is more tricky when you are doing a personal and business filing but you will get through it!

[Inthestorm]

Well...I think we have to move??? We own a big house, with a big payment. since we had acquired more things before the crash (like a land "investment") we didn't have enough work these last three years to make the payments, so we borrowed against the home equity. Now it's used up and our house payments plus equity line payments are HUGE. Even if we decide to keep the home, won't that hurt the other exemptions we need to take such as horses (3), truck and small trailer (to get them to the vet, etc.) in addition to Dh's work truck and tools to stay in business. We're in GA...and I'm thinking that's just too much to try and keep???

God, I HATE all this not-knowing. I can feel the stress aging me by the minute.

[eddiep]

If you are current on the mortgage payments you can keep the house in ch7, if you are behind you could catch up in ch13. If you can afford the payments you can keep the house.

The exemption on the house is usually seperate from everything else and you can't "save" the homestead exemption for other assets. So unless you have alot of equity in the home you should be fine there too.

BK is scarey but the goal is to PROTECT you and your assets from your creditors. You can keep your house and tools and vehicles in most cases. It just depends on how much equity you have and the specific laws in your state. Don't give up hope, it will probably turn out better than you think. YOu may be able to strip the HELOC too.

Here is a link for some GA specifics

http://www.atlanta-bankruptcy-attorney.com/georgia_exemptions.html

I hear you on the stress! But I promise it will get better, knowledge is key to getting through this!