Question about savings accounts before filing

[jwhit]

I am new here. I met with an attorney yesterday and I will only be able to file Ch. 13. I was disappointed but the more I thought about it last night, the situation will be better than I am dealing with now. I have a foreclosure date of 5/23. I am planning to surrender the home since I am severely underwater on it. I have about 24K in credit card debt and have been sued and am 9K underwater on my car. I will keep my car.

I was wondering how much in savings or a retirement fund you are allowed to have when you file? I was in a MVA and will be getting a settlement of approx 16K (covers not much more than lost wages) but don't know when. In my state, if it comes after I file, I can keep 10K. If it comes prior to filing, would they dismiss my case for having too much in savings? I have no other cash on hand or savings account. I work for the state so I am in a pension plan and can't touch those funds until I leave employment.

[SMinGA2]

What reasons did the attorney give for saying you must file ch. 13 as your only option? Such as have you filed ch. 7 in the past 8 years, assets you'd like to protect, etc.?

My understanding, if you are a party to a lawsuit where you may receive compensation its an asset even if the case has not been decided. How much you can protect/keep for yourself depends on your state's exemptions. Retirement funds are generally exempt.

How long ago did you buy your car?

[LadyInTheRed]

Welcome to BKforum!

Even if you don't receive the settlement before filing, it is an asset that must be listed on your petition and exempted to whatever extent you can. Oregon exemptions are listed at http://www.legalconsumer.com/bankrup...-law.php?ST=OR. ERISA qualified retirment accounts are exempt under federal law. I believe that applies even if your state exemptions don't cover the asset.

Having non exempt assets is never a reason to dismiss a BK case unless you try to hide an asset.

In a Chap 7, the trustee can liquidate your non-exempt assets and distribute the proceeds to unsecured creditors. In a Chap 13, you can keep non exempt assets as long as during the length of the Chap 13, your plan pays at least the non-exempt value of the assets to your unsecured creditors. In other words, the unsecured creditors must receive at least what they would in a Chap 7 liquidation. This is called the Chapter 7 liquidation test.

Be sure to consult with more than one attorney before you hire one. You may get different advice.

[jwhit]

What reasons did the attorney give for saying you must file ch. 13 as your only option? Such as have you filed ch. 7 in the past 8 years, assets you'd like to protect, etc.?

How long ago did you buy your car?

Thanks! I have to file 13 since I fail the means test. This was the 4th attorney I had consulted and he said that there was just no way to make it work since I make about 12,000/yr too much. The others had told me the same thing, including one who handled Ch 13 but I was not comfortable with him. I liked this attorney much better. We spent about 1.5 hrs strategizing in my consult. My car is almost 4 years old but only has 34K miles on it and has had no mechanical issues. We discussed me getting a new car before but with my credit and no down payment, I am not likely to get a better deal.

[jwhit]

LadyIntheRed: Thanks for this website! It was helpful to look at. I had researched Ch7 but not 13 before now.

[catleg]

If you are only 12,000 over the median you should be able to work something out.
A new car loan at 500/month eats up 6000 per year of that difference.
Then you sign up for extra life insurance, disability insurance.
You're pretty close.
They make more money off ch13 and they don't have to think as much.
Alternatively if you are forced into ch13 increase your 401k contribs and take out a loan for something.
Scorched earth policy, leave as little as possible for unsecured creditors.

[jwhit]

If you are only 12,000 over the median you should be able to work something out.
A new car loan at 500/month eats up 6000 per year of that difference.
Then you sign up for extra life insurance, disability insurance.
You're pretty close.
They make more money off ch13 and they don't have to think as much.
Alternatively if you are forced into ch13 increase your 401k contribs and take out a loan for something.
Scorched earth policy, leave as little as possible for unsecured creditors.

I would love to file ch7!! Do you have any advice on how to find an attorney who can make it happen? The first 2 I met with only did ch7. This one has a very, very large firm and is highly regarded. Am I having such a hard time since Oregon doesn't use federal exemptions? Or because I am a single filer w/no dependents? My current car loan is $632. If I sign up for extra life insurance now, would the trustee question it?

I feel especially pressed since my foreclosure is next month (typo in initial post). Plus today I had court ordered arbitration for a JDB that my attorney was trying to get postponed. I had prepared to defend the lawsuit but my attorney was trying to get it postponed. The collection agency's attorney would not allow it but I did not know that until it was too late. Since I didn't show up, I lost and now have a judgement....just trying to find out when the wage garnishment will hit.

I just did a means test and I don't pass by $166/mo. I am so close so any ideas are appreciated!