WildCard Question

[SinkingFast]

I've seen everyone mention the Federal WC and some state WC's.

Since we moved to Indiana 5 months ago (Hubby a year ago), we have to use the old state's exemptions under the new laws, right??

I took a look at the wording for the Homestead exemption for our former state, Missouri, as compared to some of the states mentioned here with Homestead WC's. Am I right in thinking we aren't entitled to use the Homestead as a WC??

We aren't interested in keeping the house in Missouri so we fig'd we'd just let it go in the BK. But if we can apply the Homestead $$ elsewhere that would be GREAT.

Also, I don't quite follow the Federal WC everyone keeps talking about. I followed a link somebody posted and read the exemption, but it just seemed like gibberish. Can someone please explain?? I tried doing a search and still didn't get a clear picture.

Thanks much.

[StaciMM]

My understanding (take it for what its worth, LOL) that if you file under the new laws:

You use the exemptions for the state you've lived in for the past 2 years.

If you have not lived there for 2 years, you use the state where you lived for the majority of the 6 months before the most recent 2 years. So if you file Jan 31 06, you'll look at where you lived from July 1 03 to Jan 31 04.

If you did not live in one state for at least 91 days during that spell (didn't have majority in one state) then you use the federal exemptions.

I didn't see anything about MO allowing a WC in lieu of the homestead but I did see:

WILD CARD
$1250 of any property if head of family, else $400; head of family may claim an additional $250 per child
513.430(3), 513.440

That is from bankruptcyinformation.com, so I don't know if the #'s are accurate or up to date.

For federal exemptions, if you don't use your homestead exemption then you can use 1/2 the value for a WC.

[SinkingFast]

OK, So now I'm thoroughly confused

TY Staci for the info. You give so much time to this forum helping others!!

I just got off the phone with a para legal who works for one of the attny's I contacted for a consult appt. The attny has a backlog from the Oct deadline and has not filed any new cases since. I told her about the different state thing so she was aware of that. Here's what she told me:

Since we don't want to keep the house, we should probably just take it off the market and let it go in the BK. After the BK is done, then we could offer it back to the lender as a Deed in Lieu of Foreclosure. They probably would go for DIL because there's only the 1 lien on the property (the mortgage) and it would save the lender money and hassel for some legal process they'd have to go thru to get our names off the deed.

Also, by not keeping the house, we are entitled to exempt $16000 in personal property. $15K Federal and $1K state is what I understood. That's furniture, belongings, etc, and vehicles. She went thru each vehicle description with me and gave me the value they would submit to the court for every vehicle. After cars, including the equity in the one we have a loan on, we'd have about $5K left to cover our personal belongings, dishes, furniture, etc. She said an average household has a value of about $3K. Unless we had something else of value such as a boat, artwork, whatever. We don't have any new furniture and we don't have a new expensive entertainment system or plasma TV. She felt we would be covered and be able to keep everything we currently have. If we are at all uncertain, they have an appraiser that will come do a walk thru, take a look at our things, and give us a professional valuation.

Gee, I hope that's true.

Another tip I got from the para legal:

The attorney she works for wants no credit card charges for minimum of 70 days prior to filing. 90 days is better. The obvious reason is fraud, but there's another reason as well. This gives the Trustee and honest picture of your finances and what kind of balance you actually maintain in your bank account after routine living expenses. If you maintain a balance in excess of the limit allowed, the Trustee will take the excess funds. She told me the Trustee just doesn't take all the money you have in your bank account. That was a worry for me because Hubby's employer pays by direct deposit. What if they happened to hit our account on the day he got paid. The para legal told me the Court is looking for an average balance. Not spike balances.

The para legal also told me that Trustees are not going to go to the expense and trouble to pursue something unless they really think there is something for them to get. If your attorney has a good working relationship established with the Trustees in your area, you typically don't have any problems with the values you establish for property.

About the new rule requiring you to establish a fair retail value for your goods,..... Who sells 10 year old sofa's??!! You find those at retail outlets like Goodwill. So if you need a value on various household items, go to Goodwill and look around. See what they are selling similar things for. That was specifically discussed in a recent seminar regarding the new BK Laws that the attorney she works for attended.

[StaciMM]

For belongings & such, do the best you can to approximate. The only time you'll have a problem is if you undervalue something of value. If you're pretty sure its worth next to nothing, you'll be fine. (Because even if you list $100 and its really worth $150, its not enough to make the trustee want it. But hide your desk from Bkfiler...)

Regarding the house out of state-don't waste another moment on it-if you file BK, it becomes the lender's issue not yours as you will surrender it. As far as I know, you won't need to bother with a deed in lieu.

Regarding exemptions, you should be ok going by the advice of the attorneys/paralegals in your area. THe new law and new jurisdiction standards are one of the things that the bk legal world is adjusting to, but they were mainly designed to keep people from planning their bk by moving to FL, putting all their money into a house, and then filing bk several months later. It might be a little confusing trying to figure out what is what, but that is why its good to hire an attorney. Ultimately, it might be good to spend an afternoon at the bk court looking at other filings thru Pacer-just to see how they did their paperwork.

[SinkingFast]

My one real worry now,....... After robbing Peter to pay Paul whilst hoping things would get better, and wrestling with the decision that BK was the best viable alternative,........... I hope we find a good attorney to represent us. The para legal I spoke to today said she didn't know if her boss would even consider us because of the Out of State issue. She was jotting notes the whole time we spoke. She said she'd chat with him and see what he decides. Either he or she will get back in touch with us tomorrow or the next day. We may wind up having to find an attorney in our old state to file for us with the new law changes.

Oh, and, another tip,......... That attny is also timing starting any new files around income tax time. Late March at the earliest. Lots of people use their return to pay the attny fees. It's also in the client's interest. Most people would have gotten their return and spent it so the Trustee can't ask for it.