19 weeks until we can file

[Chrysalis]

Thanks, jb!

You're right, of course, about the attorneys doing the calculating. I was just trying to get a general idea of what he was even talking about. My husband and I have still been trying to make some big decisions -- and of course these discussions take place on a weekend, when I assume the attorney isn't "on duty". ;)

I think I understand what you're saying. FMV on our two secured vehicles is ~$47,000 and the only non-exempt assets we'd hypothetically have would be maybe ~$12,000.

[Chrysalis]

I have been following this thread, but have not posted anything until now. My take is that whether it is Chapter 7, or Chapter 13, bankruptcy is probably not for you. The reason is because it sounds like your income is too low to cover your living expenses, so you must necessarily rely on credit in order to get by. Even discharging 100% of your existing debts, and surrendering all of your secured collateral will not help if you don't have sufficient income to meet your living expenses!

I've been thinking about this post ever since you posted it. You are 100% correct. When I do the spreadsheets, I see a big problem.

But you know what the biggest problem is I see? We spend too much money, because we've always been able to.

My husband has worked and worked and worked until his body told him -- STOP -- you cannot do this anymore. It was at that point, in October, when things really started to change. For the first time EVER, we've had him home on the weekends. We've had some sort of schedule each week (although it does change, each and every week). Too see him in that sort of constant, never-ending pain scared me enough that I realized I have to get a career -- not just a job, a career. It gave me the courage to go back to school -- and though it's been stressful, it has been a great change for all of us.

We are talking more than we ever have before. He is more involved in the finances because he FINALLY has to be. There is no longer the excuse of being on call, and not being here. No more burying our heads in the sand. Time to face reality.

It's going to be a new reality, and I go back and forth between having moments of serious anxiety and actually being really excited. You know what we haven't really had to have? Discipline. Like they say about kids actually needing to have rules and boundaries, and that it makes them feel loved and safe -- yeah. Like that.

We haven't always spent as much money as we've spent lately -- but we have always had credit card debt. From day one. We both started off on the wrong foot, moving out at the age of 18 without a dime to our names. Neither of us had a great example of financial planning -- him, because his mother was a single mom who worked 3 jobs and never HAD the sort of money he was able to make -- and me, I suppose because my parents were busy working so much, and because they just never shared anything with me about their financial difficulties, if they had them. I know they used credit, we always had "toys" like a boat and a camper. They still struggle with my dad overspending to this day, and my mother is resentful about still working in a stressful full-time job at the age of 69.

As much as this whole situation just sucks, I think it is going to be really good for all of us. My kids will learn lessons they never would have otherwise. They will have food -- I don't mean to make it sound that dire. They will still get to do their activities -- we will make sure of that. But changes, they are coming. And we will all learn and grow together as a family. My kids need to be more involved -- and they have been. Our youngest (10) LOVES to cook. Someone just has to have the time to slow down and teach/supervise him.

Somewhere along the way, we lost our way. Big time. But I think we can turn this around. I really do. I have found my voice with my husband, and I no longer feel guilty and like this whole situation is my fault. That's BS. I'm over it.

He was out pricing new truck tires the other day. We don't need new truck tires. Quotes were $1000 and $1200. I told him, I think you are going to be driving with the tires you have for some time to come. He didn't throw a fit ~ he's not like that at all. But he had a little reality-check. I think there are going to be a lot of those.

[Chrysalis]

You guys, there are some parts of this process which just make me feel SO dumb. I think I just had a lightbulb moment.

This whole time -- I've been thinking that the total value of everything we own had to be under the Indiana wildcard exemption amount of $20,500 for the two of us. I thought, if we were over that amount -- or if they had any reason to think we were -- they'd just start taking things.

We had an entire discussion today about, "I wonder if you get any say in what they take" ... "I wonder if I could ask them to take my wedding rings instead of your 4-wheelers" ... "I don't know, I don't understand how this works" ... etc. etc.

I've been reading through the forums tonight, and I think I've figured this out:

You "exempt" what is IMPORTANT to you -- up to $20,500 for the two of us.

Our total value of every single dilapidated possession in this house does not have to be under $20,500. Does it?!

So it's totally fine for your total garage sale value of property to be over that $20,500 mark, and it does NOT mean that we cannot file a Chapter 7, OR that they are going to just start randomly taking whatever they want. Am I right...?

If so, wow, I feel like a moron... and I've been doing a whole lot of worrying over absolutely nothing.

[justbroke]

In a Chapter 7, you exempt that which has a value and that you want to keep. Anything that you don't exempt -- or any portion of the value that you don't exempt -- may force a sale of that property. What you list on Schedule C (which contains the 100% exempted property) is what you keep without threat of sale (liquidation). (While there is no liquidation in a Chapter 13, you still use exemptions for property that you don't want to be subject to the Chapter 7 liquidation test.)

You do not need to exempt everything. I exempted as much as I could with Florida's measly $1,000 + $4,000 unused homestead for a total of $5,000. My personal property exceeded that amount.

The goal is to protect (exempt) the things that you really want to keep. When you exceed the exemption amount, the Trustee will be more interested in getting you to "buy back" the property (the non-exempt equity in the property) from the bankruptcy estate. You can typically negotiate the "residual" value after cost of the sale. I recently read a case where 35% was used as the "fire sale" cost of selling personal property. Offering 50% - 65% of the "non-exempt" value may make a Trustee happy because it's a lot less work and the same money they may have recovered for the bankruptcy estate.

[Chrysalis]

Thanks, jb. So I am finally understanding it correctly. Geez... You know, I think I already knew this when I started researching awhile back -- but with emotions running high, anxiety creeping in.. It just got all mixed up in my head. So thankful for this forum, because as I was reading through old posts tonight about valuing property, as I said ~ the lightbulb came on, and it finally "clicked" with me. Man, I am short on sleep & have been way too stressed with all of this going on + finishing up classes at school. Believe it or not, I'm a straight-A student & scored the highest they've seen on the exam to get into nursing school. So my excuse HERE on the forum is that all of my brain energy is going to school! Lol.

We probably don't even have $20,500 worth of things we actually care about. All of this worry this weekend for nothing.

The attorney had suggested taking some of this money and letting our son get a MORE expensive car (he has $3900 saved) and I was thinking, "I don't know how we could do that... With all of our old furniture, appliances, etc, we are already close to the limit..."

Well, no. They aren't going to want those things & we don't need to exempt them! What good news.