Would Trustee See This as Fraudulent

[StaciMM]

I was trying to be nice, LOL. You make it hard Bkfiler!

I don't think I'm wrong. Especially since the first round of 'collections' is often internal, when the creditor is still sending monthly statements & charging late fees. They wouldn't send it outside (or sell it) until they charge it off, at that point they no longer consider it a likely source of revenue.

[bkfiler]

I was trying to be nice, LOL. You make it hard Bkfiler!

I don't think I'm wrong. Especially since the first round of 'collections' is often internal, when the creditor is still sending monthly statements & charging late fees. They wouldn't send it outside (or sell it) until they charge it off, at that point they no longer consider it a likely source of revenue.

now i know its hard for others to see us argue, esspecially you being the mother of my pumkin and all, but the general collections time is 120 days (3 months). thats when it goes to 'collections' usually. this is the standard.

after that they try for at least 3 months before attorney gets involved. this is standard.

yes anything can happen - and if its a mom and pop place then they can go the day after the due date lol.

look at my case, it took them, a very long time to file suit. but collections stated 3 months afterwards on all of them mostly.

[OnlyBrokeOnce]

Here's my take on this one.

1) Keep the car. It will help with your expenses.
2) Take a loan thru the IRS. Wouldn't this also help with your expenses since IRS debts are non-discharchable?
3) File BK
4) After discharge and the waiting periods, sell the car! THEN use the proceeds to pay the IRS.

[jennga]

None of my cc's went to collection at 3 months. A couple of them went into collections at 4 months, the others at 6 months. No threats to sue on any accounts until after CO's that occured after 6 months of non-payment.

Just my experience for whatever it's worth.

[StaciMM]

Onlybrokeonce has a good point-you should be able to work out a payment arrangement with the IRS, and that would count in your BK budget.

[bkfiler]

irs loans arent that expensive buy the way. wouldnt that be cheaper?

i agree again!

[SinkingFast]

OK, tell me if what I am thinking would happen is correct.

First, I wanna be clear about our exemption. We are under Missouri which says we can exempt "Any motor vehicle in the aggregate, not to exceed three thousand dollars in value". Do we double that 'cause we're filing jointly??

Depending on the day, and who's doing the valuation, we have $7500 to $12000 worth of equity in our truck. We know we owe Uncle Sam a substantial chunk for sure. Maybe some to states as well. We could easily spend the money from the sale of the truck, no sweat. If we use our vehicle exemptions to cover the older cars (kids' cars and Hubby's truck), we can't protect our equity in the truck. Maybe part, as in tiny bit.

Taxes are a priority debt, right? As a priority debt, the taxes must be paid before CC's, right? Trustees take what makes them money, right?

If the Trustee takes the truck to sell it, the proceeds go straight to the IRS and/or states to cover our tax debt. No money for the Trustee, right? Well administration fee, but no big bucks by any means. And there would be costs to sell the truck as well. Is that right? So if the Trustee can't make any money from selling the truck, would he/she most likely take it anyway??

Have I learned correctly?? Is this all right or am I totally confused?? Would it be a gamble??

[Graphic]

You double whatever your exemptions are if you file jointly so you are correct on that. As to the truck situation I would think they would take it. IRS is, like you said a priority debtor, and even though they don't make any money off of it per sae they are both federal so I would imagine they would still take it. I don't know for sure, just my opinion but if it was me I would think they shall. Good luck :P

[SinkingFast]

New but unclear info regarding Truck

We saw another attny yesterday. He says we should keep the truck and file our taxes. Submit the filed taxes with the BK saying we plan/need/want to arrange a payment plan with IRS for taxes owed.

The attny will sprinkle our vehicle exemptions around to keep the cars from being appealing to sell. He said he'd put a chunk on Hubby's truck to be sure it was protected. Evidently, whatever you exempt on an older vehicle, the Trustee has be very certain that vehicle will bring more than the exemption to be worth their while. Because, the Trustee has to pay us the amount of the exemption. Say we have a car with NADA book value of $2000 but is in really sad shape. We exempt $1000. The Trustee takes a look and decides not to bother with it.

Somewhere in here, I get lost. The attny doesn't seem to think the Trustee will sell the truck even tho we have equity in it??!! He said over and over again, "Keep the truck. Work out a payment plan with the IRS. The IRS will take next year's tax refund. Trustee won't even get that. In 2 years or less you will be paid up with the IRS. Plus, the IRS payments help with your expenses to go Ch 7." Is that because the Taxes to the IRS are priority debt?? The Trustee will have to pay the IRS first and potentially not make any money off the sale of the truck??

Is this just a bunch of Bull or what?? Would we be playing a game of "Chicken" with our exemptions?? See who flinches first??

[StaciMM]

The taxes help with your ch. 7 potential because it is one more monthly expense that will be considered. Such as the first attorney you spoke with that said $190-something for a ch. 13, if you went w/ his version of your expenses and deducted an IRS payment, you'd no longer have enough for a 13 payment.

Regarding the truck-I don't recall how much equity you have compared to how much your exemption is...

[SinkingFast]

The taxes help with your ch. 7 potential because it is one more monthly expense that will be considered. Such as the first attorney you spoke with that said $190-something for a ch. 13, if you went w/ his version of your expenses and deducted an IRS payment, you'd no longer have enough for a 13 payment.

Regarding the truck-I don't recall how much equity you have compared to how much your exemption is...

We get $3000 each, or $6000 total for household goods. Plus we have a couple wildcard things. Any property of any kind not to exceed $600 each, $1200 total, and another one. Any other property, real, personal or mixed, or debts and wages, not exceeding in value the amount of $1250 each, $2500 total, plus $350 for each of such person's unmarried dependent children under the age of eighteen years or dependent as defined by the Internal Revenue Code of 1986. The last exemption cannot include 10% of gross earnings that have not yet been paid.

We have $3000 each, or $6000 total in exemptions for vehicles. The attny we saw said he would sprinkle that around, a little on this vehicle and that, a bigger chunk on Hubbys's truck to protect it. Never said how much he'd put on the newer truck.

Depending on who does the values and what source they use, we have anywhere between $7500 and about $12000 in equity in the truck.

So we specifically asked, "Shouldn't we sell the truck to pay the taxes?" and he said, "No. Keep the truck. It's the nicest one you own. The others are old and probably breakdown a lot. This one has warranty. Just keep it. Plus the IRS payments will help with the Ch 7." But we didn't get a clear explanation of how he thought we'd come out the other side of BK, with the truck.

Why would the Trustee not sell the truck? Is it because the first person to be paid is the IRS? No money from the truck for the Trustee put in their pocket??