Questions Regarding Chapter 7 in FL

[metalone]

I have multiple chronic health conditions and I really need some feedback here. I have done a little research but thought I would ask a few questions here before seeing an attorney. I'm married with no children and live in FL. We live in an apartment (do not own a home) and all of our debt is unsecured (that I can think of). We are current on all accounts.

My husband and I filed for chapter 13 in 2007 and completed a 5 year payment plan. So we were finally debt free and looking forward to a brighter future. Well then the ball dropped and I was laid off from my job in July 2013 and also had more unexpected health conditions occur. Since then I have not been able to work steadily and have filed for SSD and was finally approved in the last couple of months. In the close to 3 years of waiting I drained my retirement funds and some of my husbands as well. The back pay was not enough to pay the bills off either. I am now considering looking into filing chapter 7 bankruptcy. From what I understand my SSD payments would not be included for the means testing so we should fall below the income limit for 2 people in FL. Here are some concerns I have:

1.) We have sold tons of things on eBay in the past year to make ends meet and therefore there are large deposits on our bank statements from PayPal transfers - are we going to need to wait 6 months to file so that those fall off and the trustee wouldn't question them?

2.) We own two vehicles free and clear - both older and not worth a whole lot but definitely worth more than what FL seems to allow. We have a 2002 Toyota Tundra and a 2005 Toyota Tacoma - probably worth $10 - $15k total I'm guessing. Will the trustee want to confiscate one of the vehicles or possibly both? My husband uses my vehicle - the 2005 to go to work everyday and for his part time job as well. Will taking out loans on them or at least one of them prevent this? We want to keep them both but surely the 2005...

3.) I have spending urges and cycles and greatly overspent during this time - large in part due to one or more of the meds I was put on. I even realized it one day and said it myself what the heck am I doing and I broke down in tears with an anxiety attack. When I spoke to my doctor he was like "Yes, the medicine can cause people to gamble, overspend, etc." - I was in total shock and did not realize this. So I have worsened the problem greatly myself and still have issues with this currently. A lot of it was spent traveling, on things for myself, my husband, etc. I'm guessing we need to stop all credit card usage and just use our checking account only going forward?

I'm sorry this is so long and I thank you if you have read this far and can offer any advice or insight. I have just ordered the NOLO Chapter 7 book as well. I need to figure out what the heck to do and if I should go ahead and schedule an appointment with an attorney soon... Any advice is greatly appreciated!

[justbroke]

1.) We have sold tons of things on eBay in the past year to make ends meet and therefore there are large deposits on our bank statements from PayPal transfers - are we going to need to wait 6 months to file so that those fall off and the trustee wouldn't question them?

I had those as well, and it was not an issue. Some Trustees are only looking at bank statements to see "large" transfers of money in and out (not related to payroll or benefits).

2.) We own two vehicles free and clear - both older and not worth a whole lot but definitely worth more than what FL seems to allow. We have a 2002 Toyota Tundra and a 2005 Toyota Tacoma - probably worth $10 - $15k total I'm guessing. Will the trustee want to confiscate one of the vehicles or possibly both? My husband uses my vehicle - the 2005 to go to work everyday and for his part time job as well. Will taking out loans on them or at least one of them prevent this? We want to keep them both but surely the 2005...

You would get $1,000 for each debtor, so that's $2,000 towards the vehicles. Unfortunately, you have a lot of equity and the Trustee will ask you to buy the equity or the Trustee will want to sell the vehicle. A strategy, which some attorneys won't advocate (or even speak about) is to actually borrow money against the vehicles. The loans would need to protect at least $2K less than the value.

3.) I have spending urges and cycles and greatly overspent during this time - large in part due to one or more of the meds I was put on. I even realized it one day and said it myself what the heck am I doing and I broke down in tears with an anxiety attack. When I spoke to my doctor he was like "Yes, the medicine can cause people to gamble, overspend, etc." - I was in total shock and did not realize this. So I have worsened the problem greatly myself and still have issues with this currently. A lot of it was spent traveling, on things for myself, my husband, etc. I'm guessing we need to stop all credit card usage and just use our checking account only going forward?

Yes, you need to stop using the credit cards. Admitting the problem is the first step. I know that when I'm depressed I also like to spend money.

I'm sorry this is so long and I thank you if you have read this far and can offer any advice or insight. I have just ordered the NOLO Chapter 7 book as well. I need to figure out what the heck to do and if I should go ahead and schedule an appointment with an attorney soon... Any advice is greatly appreciated!

You may want to hire an attorney for this. (Use some of the money from obtaining a loan on the vehicle(s) to help or totally pay for the attorney. You have juicy assets (the equity in the vehicles). You didn't mention a homestead.

Remember, that Florida only allows $1,000 for personal property (x 2 if married filing together), so there's $2K. You each get a $4K unused homestead exemption since you don't own a home, so there's another $8K. That means that you should have at least $12K in exemptions but remember that $2K is only for the cars and the other $10K would be wildcard. You could probably protect one car in total and have some left over to protect your personal property (furniture, clothing, shoes, household stuff).

Yep, you should definitely consult with several attorneys. It may be difficult to get a "normal" loan on those vehicles because of the age. If you're a member of a credit union, I would start there. I would try to avoid a title loan as the interest rates on them can be quite high and set you up for failure.

[metalone]

justbroke, thank you for your comments. I will speak with husband this evening and discuss ceasing use of the credit cards going forward (unless rent comes and we can't pay - that's the only exception I can think of that we might face - so I don't know how they would look at that). As for the vehicles, we bank with a wonderful credit union but don't owe them any money so I don't want to go to them to look for a loan(s) for one or more of the vehicles. Maybe I can find a different credit union or bank to loan us money on one or both... Thank you again for your input and if anyone else has advice as well I am all ears.

[justbroke]

Usually, necessities are okay so long as they are not extraordinary. I personally charged food and gasoline just before filing. The bankruptcy code reads that charges within 90 days which exceed a threshold for 'luxury' goods are considered presumptively fraudulent (because bankruptcy code considers you to be insolvent 90 days before filing).

If you're already using credit cards to pay rent, then there is definitely something wrong with your income versus your expenses. (Even if you're thinking about it, this could be problematic.) When all of your debt is gone, will you be able to survive?

[metalone]

Yes, when all of the debt is gone we should be okay as we have been paying off some credit cards monthly and more than the minimum payments on others. But now things are catching up with us and we have several cards with 0% APR that will expire very soon.

[justbroke]

May I suggest minimum payments until filing? I know the impact of the 0% APR expiring from experience. I actually have two promos on my CareCredit card expiring in September and will make a large payment at that time.