Questions???

[Liaah]

Me and my husband are seriously considering bankruptcy. We owe approx $85,000 in unsecured debt. We do pass the means test in our state by about $5,000 under. I have a few questions.

1. We received a tax return of $1,600 and spent every penny on living expenses. I realize that was dumb but hindsight is 20/20. We are not planning on filing until probably late summer or early fall say Aug, or Sept. Will they want that money back?
2. We also received a bonus from my husband's job for about $2,600. We also spent all of that on living expenses. Do you think they will want any of that? The credit card co's already have all of that money!
3. My husband owns part of a property worth about $60,000. He inherited it along with his uncle. We don't care about that property. Will they just sell the house or ask his uncle for my husband's half? I assume all of that will go towards our debt?
4. I am also worried because my dad has my name on all of his accounts. Checking, savings, money markets to the tune of over $100,000. The money isn't mine, it's all my dad's. He wanted my name on it because he is older and at the time it made sense to put it on there for his benefit in case he was unable to get the money himself. If I take my name off of those accounts now will they find out and try to take half? I don't receive any statements concerning these accounts but the statements that are sent to my dad's clearly have my name on them.

I would appreciate any help any of you can offer! Thanks!

[SinkingFast]

Me and my husband are seriously considering bankruptcy. We owe approx $85,000 in unsecured debt. We do pass the means test in our state by about $5,000 under. I have a few questions.

1. We received a tax return of $1,600 and spent every penny on living expenses. I realize that was dumb but hindsight is 20/20. We are not planning on filing until probably late summer or early fall say Aug, or Sept. Will they want that money back?

Planning this far in advance, this year's tax refund probably won't be an issue. If you get later into fall, the Trustee may look toward next year's refund. They can take a prorated portion of the next refund. If you file in September, that would be 9/12th's. October would be 10/12th's. That kind of thing.

2. We also received a bonus from my husband's job for about $2,600. We also spent all of that on living expenses. Do you think they will want any of that? The credit card co's already have all of that money!

The bonus will just be a part of your 6 month CMI by the time you file. When you go to your 341, tho, the Trustee may ask if either of you are entitled to or receive bonuses. Hubby got asked. He doesn't get bonuses, so I'm not sure what would happen if you do.

3. My husband owns part of a property worth about $60,000. He inherited it along with his uncle. We don't care about that property. Will they just sell the house or ask his uncle for my husband's half? I assume all of that will go towards our debt?

Is Hubby's portion worth $30K?? A lot of what might happen will depend on your Exemptions. If you use State or Federal. The Trustee could seize Hubby's portion. But there are other options. The Trustee could come to some sort of $$$ figure he's/she's happy with and settle with you. You can pay it back in possibly 12-18 monthly installments. Or you could possibly do a 722 Redemption loan.

4. I am also worried because my dad has my name on all of his accounts. Checking, savings, money markets to the tune of over $100,000. The money isn't mine, it's all my dad's. He wanted my name on it because he is older and at the time it made sense to put it on there for his benefit in case he was unable to get the money himself. If I take my name off of those accounts now will they find out and try to take half? I don't receive any statements concerning these accounts but the statements that are sent to my dad's clearly have my name on them.

Same thing here. My name was on my Mom's accts. This was our attny's advise,.......... Take your name off Dad's accts. ASAP. And you do not have to disclose it to the BK Court. The money is not yours, for one thing. And you aren't closing any bank accts. The accts will remain open, just your name won't be on them.

I would appreciate any help any of you can offer! Thanks!

I responded to your Q's above.

HTH's.

[Liaah]

Thank you!!

My husband does get 2 bonuses a year. I just didn't want to have to come up with money already spent. He would get another one in Sept for around $1500 but that one we could let go. I am sure they would want it!
Do they take vacation pay? They pay my husband at the first of the year his whole vacation pay in one early check, but then when he takes time off he doesn't get paid. They wouldn't take that would they?

Yes, my husbands half would be $30,000. We are trying to work out a deal with his uncle to just buy us out and use that money to pay off some debt. That could help us avoid bankruptcy altogether but his uncle is so hard headed we will probably have to just let the courts have it. Even though it would be his best interest to settle with us. We have some equity in our home so the whole homestead and maybe the wildcard amount will go towards our equity to save our house. I had no idea the trustee would work out a repayment plan. I have never heard of 722 redemption loan?

You will probably hear from me again as this thing progresses. Thank goodness there are people out there willing to share their time and experience.

Thanks again!

[SinkingFast]

You can redeem, or buy back, assets from the Court. 722 refers to the Section of the Code that allows for the Loan. 722 Redemption Loans are most often associated with cars, but can be made for other purposes. Only Ch 7 filers can get a 722 Redemption Loan.

Your attny would have to arrange it and assert that the loan poses no undue financial hardship on you. Then the Trustee would have to agree.

You can only use a Homestead Exemption on your primary residence. So even if you had excess Homestead Exemption left, you couldn't apply it to the land. Unless your Statute is worded that unused $$$'s can be applied as a WildCard to any property.

Same thing with the vacation pay. It will already be figured into your CMI. The second bonus,........... If you can hold off until after then to file, you could probably use that money to pay your attny's fee. Again, the 2nd bonus would then be part of your 6 month CMI. Be sure to tell attnys you Consult about this pay structure and get their thoughts.

Trustees have costs to sell seized property. Houses are the most expensive property to sell and the most time consuming. Real Estate commissions, etc. Same costs as us. On average, about 10%. It's quicker and easier to strike a deal with the Debtor/Filer for a settlement.

Don't go selling the property to Uncle. Property transfers within 1 year of filing have to be disclosed. Uncle is family so he would be considered an Insider. A double whammy there. Best to just ride it out and see what happens if you can't strike a deal and avoid filing.

[juststupid]

Sinking - My husband does get bonuses, and when they come they are good ones. But heres the thing we never know when we will get them (except the Christmas one)... how would that work? Would they want any bonus he gets?

Thanks.

[SamanthaJones]

How can someone buy back an asset from thr trustee?

Like, I mean- WHERE did the money come from all of a sudden (example- buying back excess equity in a vehicle by paying the trustee the value over the allowed amont?) I've been wondering about this...Like where does the money come from also to pay the lawyer?

[juststupid]

Samantha - I can tell you where our money came from to file... my husband signed away the next six years of our lives to the army. LOL.... and to think we could have been done this month and wouldn't have to worry about another deployment.

[SinkingFast]

Like, I mean- WHERE did the money come from all of a sudden (example- buying back excess equity in a vehicle by paying the trustee the value over the allowed amont?) I've been wondering about this...Like where does the money come from also to pay the lawyer?

There was someone here that posted about this a long time ago. They had something like $7000 in Non Exempt property. The Trustee settled with them for $3K Cash. Their Trustee said get the money from family, friends, borrow it. The Court doesn't care where the money comes from.

Here's the thread:

http://www.bankruptcyforum.com/showt...light=nc7prose

Page 2, Post 24, is where NC7ProSe talks about settling with the Court.

[Liaah]

Don't go selling the property to Uncle. Property transfers within 1 year of filing have to be disclosed. Uncle is family so he would be considered an Insider. A double whammy there. Best to just ride it out and see what happens if you can't strike a deal and avoid filing.

Help me here I am lacking in all this BK knowledge If we don't make a deal with him, the Uncle, who would we make the deal with to avoid filing?

Even if we did sell to Uncle, that would free up enough money for us that we would probably not have to file at all or at the very least, make it to a year before filing. So property transfers after 1 year will not be included in BK?

[SinkingFast]

Don't go selling the property to Uncle. Property transfers within 1 year of filing have to be disclosed. Uncle is family so he would be considered an Insider. A double whammy there. Best to just ride it out and see what happens if you can't strike a deal and avoid filing.

Help me here I am lacking in all this BK knowledge If we don't make a deal with him, the Uncle, who would we make the deal with to avoid filing?

Even if we did sell to Uncle, that would free up enough money for us that we would probably not have to file at all or at the very least, make it to a year before filing. So property transfers after 1 year will not be included in BK?

If you do sell to Uncle, then be sure you're gonna get enough money to avoid filing any time soon.

All property transfers within 1 year preceding BK HAVE to be declared. Which means,........... Regardless of who you sell the property to,.......... If you file within a year of selling, you're gonna have to declare the sale to the BK Court.

Insiders are family and friends, and business associates. People you have more than a casual relationship with. Transfers of property and assets to Insiders within a year of filing also have to be declared.

It's a rule written to prevent Filers from hiding assets by transferring things into other family member's, friend's, or business associate's names. The BK Court can go back to any Insiders you sold property to or paid money to and seize the assets "for the benefit of your Creditors".

So if you do sell to Uncle, be sure you can wait more than a year if you do happen to wind up filing BK. Otherwise, the Trustee could seize the property sold to Uncle and sell it "for the benefit of your Creditors".

If you think the funds won't be enough to avoid BK and you want to sell the property anyway,............... Sell to anyone other than a family member, a close personal friend, or someone you work with.

[SinkingFast]

Sinking - My husband does get bonuses, and when they come they are good ones. But heres the thing we never know when we will get them (except the Christmas one)... how would that work? Would they want any bonus he gets?

Thanks.

I don't know, JS.

I think it's really gonna depend on your Trustee.

Because of Hubby's position, I guess our Trustee thought Hubby might be entitled to Bonuses. Probably why he asked about it at our 341.

Your Trustee may not even ask.

Definitely a Q for you to ask your attny or different attnys as you Consult around.

[Spartan]

What if the sale is at fair market value and the proceed is secured and available for the trustee? The trustee cannot get both the proceed AS WELL AS retrieving the property too. That would be unjust enrichment. No?

[Spartan]

....So property transfers after 1 year will not be included in BK?

You may want to double check that with your lawyer.

Mine said, 2 years if you claim Federal, and 7 years if you claim state (Minnesota).

I am referring to reporting. Not sure what you mean by 'included'.

[Liaah]

I guess what I am trying to say is, if we sell to Uncle, wait until over a year to file BK, we wouldn't have to report the sale to BK?

I understand I need to talk to a lawyer from my state to see what the laws are. I will be filing in Indiana. But, it sure is nice to get some good advice from people who have been there.

Also, please tell me there IS life after BK??? I have such good credit right now and I know that is gone. I would just like to maybe a few years down the road buy a new car. My husband and I both have decided it is a cash and carry life for us from now on. But it's kind of hard to save enough money for a car.