Chapter 7 - passed means test - will interests in parents cd be sold?

[Bkq]

We passed the means test for Chapter 7 - in Arizona. However, my wife has 1/3 interest - in 3 Certificates of Deposit (each worht about $20,000) - that her mother set up for her and her 2 brothers. What impact does this have on our filing for Chapter 7 - i.e., would these Certificates of Deposit have to be cashed out??? If so, we will probably file for Chapter 13. Thanks!!

[keepinitreal]

How much debt do you 2 have?

[Bkq]

We have $120,000 in credit card debit.

[keepinitreal]

Well if she has to forfeit $20k in order to discharge $120k in a Chapter 7, that may be worth it. A Chapter 13 will have you making payments for 5 years.

Good luck with whatever you decide!

[momofthree]

I agree with Keepinitreal. If you file ch.13, then you'll have to pay in at least $20k so that you'll be allowed to keep the $20k. It'll be a wash and you'll be under the thumb of the trustee and tied to a payment for 3-5 years, and there's a chance you may even end up paying in more than the min. of $20k.

Either way, you're out $20k. You may as well just file a ch.7, let them take the money up front, and be done with it.