Chapter 7 Questions

[roger_221]

My atty said I passed the means test to file for a 7. The way I got into this mess in the first place is expenses over our means.

I am desperately trying to cut expenses.

Let's say I file on June 1. I have a truck pmt of $361. I want to sell the truck to get rid of that expense. Someone may give me an old car to replace the truck. Can I do this? When can I do this?

I'm also considering selling my home and getting a cheaper place to live. Can I do this? When can I do this? Would I even qualify for a mortgage? If so, and 'normal' interest rates are around 6%, what could I get as far as a mtg goes?

Thank you

[JollyGG]

Are you already behind on payments or are you still current?
Are you above the median income for your state?

If you still have a decent FICO I would downgrade the house before the BK, assuming it doesn't affect you Chapter 7 chances. Because you will get a much better interest rate and terms and you will have time to figure out your expenses in your new home.
If for whatever reason (too low a FICO, would effect your Chapter 7 chances, not enough time due to pending judgements, or whatever) then you need to wait until you Bankruptcy is discharged and then sell the house. In that case you would want to rent for two years. Once two years have passed you will once again qualify for traditional mortgage rates and terms. Anything less than two years after your bankruptcy will be harder to find a lender and will not be as favorable rates or terms.

As for the truck. If you can swing the payments for the next few months hold onto it and sell it after discharge. If you can't make the payments sell it before filing but make sure you either have exepmtions to cover any money made on the deal or spend the money on necessities before filing.

Any sales of assets needs to occur before filing or after discharge. You cannot get rid of assets while in an active Chapter 7.

[BKTango]

You can sell your truck as long as you get fair market value for it, and it would look better if you didn't sell it to a family member or a friend. (this would be before you file) As far as how close to the day you file can you sell it, I wouldn't know. Keep in mind that if you have a truck payment and claim it to pass the means test knowing that you are not going to have it after filing is kinda of a moral issue. As far as someone giving you an old car, again if it comes from certain people it might look odd.

Same thing with the house, don't expect to get financing right after filing bk, you cannot take on new debt while in an open bk. Also don't expect to get finacing right after bk, it usually takes at least a year or two to be able to get a mortgage after bk. But you can get financing for vehicles right after bk, with high rates of course.

Really you should probably run these questions by your attorney as they have better knowledge to how the trustee's react to certain things in your area. Or someoen else can come along and chime in here and maybe do a better job of answering these questions for you.

[CATCHMEIFYOUCAN]

After Your Discharged

Let's say I file on June 1. I have a truck pmt of $361. I want to sell the truck to get rid of that expense. Someone may give me an old car to replace the truck. Can I do this? When can I do this?

I would try to hang on to it until you discharge. Play it SAFE ! You never know what may come up between the 341 to discharge.

Best of Luck, CMIYC