How to plan cashflow before and during BK?

[bornfree2]

As I understand, my property is my property before a BK filing. Once I file, its all the trustees. Then the process starts of figuring out what i get to keep.

Also whatever I earn is also mine after I file...hence immediate need for a job/income

But can I liquidate things to raise money to survive the next 30-90 days? Is this not advised? Does that make things 'look' bad, if you ebay some things to try to raise some cash to pay bills?

Damned if I do, damned if i dont

[justbroke]

So long as you receive "market value" (whatever that means) then the Trustee doesn't care how you survived. They are worried about selling things way too cheap and usually -- and take that with a grain of sale -- only worried about larger items. For example, they wouldn't care if you had a yard sale and sold a set of pots and pans for $5. They would care that you sold a 2015 SeaDoo Jetski for $500, especially if it wasn't an arm's length transaction.

Nearly everyone doesn't worry about this unless selling larger items of value. Caveat venditor, don't liquidate down so much property that you have to buy everything all over again (pots and pans).

Short answer: The Trustee is looking for larger property transfers of value and for which you did not receive market value. Yard sales are fine if the Trustee should ask about smaller things.

(Minor correction, the property doesn't become the Trustee's property. The property becomes property of the bankruptcy estate. The trustee is just someone appointed to oversee the liquidation of the estate. The Trustee has special powers when it comes to property of the estate as they step into the shoes of the debtor and can do anything that the debtor could do.)

[bornfree2]

So long as you receive "market value" (whatever that means) then the Trustee doesn't care how you survived. They are worried about selling things way too cheap and usually -- and take that with a grain of sale -- only worried about larger items. For example, they wouldn't care if you had a yard sale and sold a set of pots and pans for $5. They would care that you sold a 2015 SeaDoo Jetski for $500, especially if it wasn't an arm's length transaction.

Nearly everyone doesn't worry about this unless selling larger items of value. Caveat venditor, don't liquidate down so much property that you have to buy everything all over again (pots and pans).

Short answer: The Trustee is looking for larger property transfers of value and for which you did not receive market value. Yard sales are fine if the Trustee should ask about smaller things.

(Minor correction, the property doesn't become the Trustee's property. The property becomes property of the bankruptcy estate. The trustee is just someone appointed to oversee the liquidation of the estate. The Trustee has special powers when it comes to property of the estate as they step into the shoes of the debtor and can do anything that the debtor could do.)

I cant meet rent by selling pots and pans. Im looking at selling stuff like an old laptop,etc perhaps. Stuff in accumulation to raise $2000+ to meet expenses going forward. Yard sales wont cut it.

- Cant ask friends and family for money or that could be seen as a loan not a gift.

- Dont dare try to get a loan.

- Forget about fixing that busted tooth that could erupt any day now..

- Been cut off from all credit cards I had since default

- And ah the infamous WF... once they hear of the BK, they will freeze up the account

- not recommended i open up another bank account.

- And what I cant even donate plasma? ... they want that cash too?


Cashflow concerns is now holding me off from filing. And the creditor lawsuit is attacking me on the other end.

(worlds tiniest violin plays 'swing low, sweet chariot' in background)

[justbroke]

No one worries about small stuff. When I say small stuff, I mean things not worth maybe $100. It's too much to nitpick. An old laptop isn't worth much. The Trustee is looking for big items that you transferred for less than market value. Remember, market value. A yard sale sets the price. Selling on eBay is similar as the market sets the price.

I think you're overthinking this unless you're selling a Jet ski or a car, or expensive jewelry or something else of a significant value. If an individual item is over $100 just keep good records of the sale. The Trustee doesn't care if you open another bank account. The Trustee doesn't care that you donate plasma.

In fact, the Trustee doesn't care that you spent what is ordinary amount for your health and safety (shelter/housing, food, medical, etc). The Trustee is looking for things to liquidate or recover. Even if the Trustee were to recover property, that's not from you at all. It's from the other person and has no (real) affect on you or your case at all.

No one is nitpicking down to this level. You are still overthinking this beyond what is reasonable overthinking.

Simply stated, pre-filing actions are not reviewed in details except for (usually) large amounts of cash disappearing from bank accounts without explanation, major property being sold/transferred (car, expensive jewelry, other expensive property), house or other property re titled/sold, giving money to insiders, and preferences. Unless you're trying to actually defraud and hide stuff, you are overthinking pre-filing things that are normally done by people trying to keep a roof over the heads.

I sold lots of things before filing. They were insignificant. I didn't sell any property which was titled (car, boat, jet ski, home, land, etc), and nothing that was over a couple of hundred dollars.

Short answer: live. No Trustee is going to begrudge you for trying to feed yourself, shelter yourself, or protect yourself. It's why the code says that certain things are "presumed" to be non-dischargeable if they are for "luxury" goods. Food is not a luxury. Housing is not a luxury. Gas in a vehicle to work, is not a luxury... and so on.

Final answer: people pay attorneys because the attorneys know all of this. The attorney takes the worrying for you. They know the rules. They can answer that what if questions. They would tell you to live.

[bornfree2]

Short answer: live. No Trustee is going to begrudge you for trying to feed yourself, shelter yourself, or protect yourself. It's why the code says that certain things are "presumed" to be non-dischargeable if they are for "luxury" goods. Food is not a luxury. Housing is not a luxury. Gas in a vehicle to work, is not a luxury... and so on.

Thank you justbroke . I know im over stressing but thats part of this process.

What do you think about this. Is it wise for debotr to liquidate property prior to filing and store it as cash prior to filing. Then declaring the cash in the filing and applying exemptions to it (wildcard).

Cash is cash. So there is no controversy on its 'fair market value'. This way the trustee cant say 'well you said xyz property is worth $1000, and you applied exemption 123 to it for $1000, but i think i can auction it for $1200, thus you are over exemption, hand it over ... or pay me the difference'

I suppose this hypothetical is similar to 'spend down' (where you buy things you need to move them into other exemption categories) but more like 'cash up' (where you sell things to raise cash for future cashflow)

If the only remaining assets are real property like a car tools of trade, and cash, then that makes the debtor case 'cleaner' doesnt it?

Or is that controversial ?

[justbroke]

These are getting to legal questions that I cannot answer. I will just keep saying that the Trustee doesn't care if you sell anything, so long as it's not to an insider, but if it's an insider that it was for market value. The Trustee is in no way nitpicking. They don't have time to do this. It's not worth $60 to nitpick. That's why they are looking for significant things or patterns.

Since your questions are getting very detailed and very specific, you are much better off asking several attorneys. Perhaps schedule a free consultation with 3-5 attorneys or visit the Pro Bono clinic. I cannot go further than to keep telling you that this is really simple in 95% of cases file which are no-asset cases and are filed through an attorney.

[bornfree2]

I understand

The problem ive had with the 'free consultation' is that they ask for so much upfront information... basically close to everything the filings ask. I dont feel comfortable doing that esp for someone to say 'yes you are a candidate for chapter 7, this is our retainer to answer specifics to your case'. Its just not a fair exchange of information and risk of my private financial info.

[justbroke]

This is precisely why you do 3-5 consultations and never choose just based on 1 or 2. You want to feel comfortable. They can't give you a realistic answer without, well, realistic answers... meaning they need the information to give a good answer. Lawyers are bound by attorney-client privilege and confidentiality. They are not risking their license to disclose any of your information to anyone else. I highly suggest the Pro Bono clinic.

[bornfree2]

justbroke wrote:

"Lawyers are bound by attorney-client privilege and confidentiality. They are not risking their license to disclose any of your information to anyone else."

Is this attorney-client privilege apply in the 'shopping around' phase or on contract signing and on retainer.

There needs to be a kind of 'fiver' for legal questions. There used to be a service called 'we the people' around here that let you sit down with a laywer for 15 minutes at a coffee shop. This was before the internet took off...now everyone googles for the info and hope its been asked before somewhere.

[justbroke]

"Lawyers are bound by attorney-client privilege and confidentiality. They are not risking their license to disclose any of your information to anyone else."

Is this attorney-client privilege apply in the 'shopping around' phase or on contract signing and on retainer.

Confidentiality exists in that scenario. Still won't risk a license for that.

There needs to be a kind of 'fiver' for legal questions. There used to be a service called 'we the people' around here that let you sit down with a laywer for 15 minutes at a coffee shop. This was before the internet took off...now everyone googles for the info and hope its been asked before somewhere.

Probably not for $5. The average bankruptcy attorney cost is $250/hr. As I keep eluding, the Pro Bono clinic is less than $5. In fact, it's the best free legal advice that you'll ever receive. In many cases the saying goes that you get what you pay for. In the Pro Bono clinic, those attorneys are sometimes from big law and are just doing their annual pro bono work.

I would never take a Google answer as it has been asked before. Bankruptcy is transactional and can vary based on the State and/or district in which the case is filed. The chapter of bankruptcy matters. The debtors specifics matter. That's why you get so may answers with caveats, even from me.

I don't think an attorney should answer bankruptcy questions in 15 minutes. There are interconnected things that must be addressed. Simply asking "can I protect my $1,500 in cash" has a different answer in different States, or even in a different subchapter of bankruptcy. A good bankruptcy attorney would spend the first 15 minutes just getting the baseline of your financials, delve in a little more over the next 15 minutes, and then, maybe, start addressing the individual intricacies of the specific debtor's bankruptcy goals and possible incomes. That takes the next 30 minutes. I would say that a bankruptcy consultation lasting fewer than 30 minutes is only providing a glimpse and not quite a solution.

[Ekop785]

Bornfree2, I just want to wish you the best and to remind you to breathe...... I could be wrong, but I can't imagine a trustee holding it against you that you had to sell something in order to keep shelter over your head (unless it was a Lincoln Continental or something). That is not legal advice, just my opinion. Rent is not a 'luxury good' or luxury service (unless you are renting a beachfront mansion or something completely out of line with what your income had been).

I know this is stressful....hang in there, my friend....try not to overthink stuff which I know is easier said than done!

[bornfree2]

Thanks brother. I will be praying for your successful outcome