Self-employed/tools/equipment

[Andyman]

In Oregon, I am allowed to exempt $1500 in tools for my business. What if your tools and equipment are worth more than that...say like around $6000?

[krielly]

Unless you are able to protect them under some other exemption then you will have to pay to keep them.

Basically, when you file a Chapter 13, your creditors have to receive at least as much as they would had you filed a Chapter 7 Asset case. In other words, you need to be paying back enough to cover both non-discharged debt, as well as the non-exempt amount of your tools of trade.

We had to file Chapter 13 because my husband had a lot of business equipment that we didn't want to lose.

Good luck!
K

[justbroke]

In Oregon, I am allowed to exempt $1500 in tools for my business. What if your tools and equipment are worth more than that...say like around $6000?

Oregon looks like $3,000 for tools of trade (and husband/wife can double).

You're going to need to find additional exemptions. Otherwise, you don't need to sell them (or lose them through the Bankruptcy), but you'll have to pay your unsecured creditors at least, the value of the tools, less the exemption. (Of course, that goes for everything else too).

[krielly]

after I posted, I came across this other post, which explains things very well:

http://www.bkforum.com/showthread.php?t=31212

[Andyman]

Oregon looks like $3,000 for tools of trade (and husband/wife can double).

You're going to need to find additional exemptions. Otherwise, you don't need to sell them (or lose them through the Bankruptcy), but you'll have to pay your unsecured creditors at least, the value of the tools, less the exemption. (Of course, that goes for everything else too).

I've got several pieces of equipment that I use, that I bought in 2006 for a total of about $8K and they are being depreciated over 5 years. I have to have a bunch of info to the trustee by no later than Jan 3rd. I have about
$4K in basic inventory and initially told my atorney I had about $1500 in tools. But, after going back and looking at my 06 tax returns I realized I had the other equipment that I had ordered for use as teaching tools. Now that I no longer teach, I suppose I could say I sold the stuff but then might have to prove it. After all business expenses are deducted from gross income I have about $1200 left over per month to live on. My attorney is submitting that I pay around $300/month into the plan. Of that, about $250 will go to the CU for my truck and the rest will go to pay my attorney so I really don't have anything more left over to pay out to my unsecured. My attorney did say that they might get 5% or less or maybe nothing. I'm just afraid that the equipment I purchased in 06 might pose a problem.

[StartingOver08]

Have you looked for the actual, garage-sale type value of your tools of trade as of today (not 2006 purchase price)?

Go back and revalue your items with an eye toward quick sale value (garage sale values are very, very low). You might find that your tools of trade have much less actual market value than you are currently showing the IRS for depreciation. Once you have everything valued, it may fit into your exemptions, or you may have very little to 'buy out'.