Can This Be Correct

[motox]

I met with an attorney today for the first time and she informed me that i could file a chapter 7.. basically i am filing on a house that i am renting out, credit cards and a boat.. she says that i can keep my current home both of my vehicles and since my wife isnt filing i can keep out travel trailer that i am secondary on the loan and not first it kinda sounds too good to be true.. does all this sound right? by the way the credit cards and the home that i am filing on are not in my wifes name at all

[Lindsay]

It sounds correct to me. I've read that very few people lose property in a chapter 7 bankruptcy. It's smart to file separately from your wife if you can, especially if the debts aren't in her name.

[motox]

my main concern is that i would decide to do the bankruptcy and that someone could have been wrong and i could lose the new house that i bought

[325Falcon]

It really depends on your state exemptions!!

IE: If that travel trailer is worth 100K with no lean then you can count on it being sold! Bankruptcy is not always painless.

[Lindsay]

There is only one home involved, right? If you just bought the house, there probably isn't much equity. Some states like Texas and Florida have generous house exemptions. I live in NY, so we only can exempt $10,000 in equity. Fortunately, we don't have any equity in our house, its upside down actually. You should definitely call and talk to another lawyer or two just to be on the safe side as all states have different rules. But from what I've read, many people who file chapter 7 retain most or all of their property.

[motox]

the travel trailer is worth about what we owe.. i think on that i would just renounce rights and my wife would have to continue to pay since her name is first.. as for the house involved the one that i want to keep is a brand new home built last year so with the housing market in michigan there is negitive equity if any at all.. and the other home that i am gonna let go is owed more then what it is worth right now as well..

[Lindsay]

If there is no equity, then the lawyer is most likely correct. The travel trailer finance company will probably just take your name off the bill and your wife will be responsible for taking care of it.

When we realized that we were in a deep financial mess, I tried to find a reason to try to avoid bankruptcy. I knew that once we stopped paying the bills, our credit would already be destroyed. We don't have any stocks, bonds, jewelry, expensive stuff. Our house had no equity but we planned to keep it. I couldn't find a reason not to file. We really weren't going to lose anything other than the horrible credit card debts that I'd struggled with for 8 years. A friend of the family filed for bankrutpcy and a year later was getting 6 & 7% interest rates on new credit cards while I was struggling to pay ours at 30%. The creditors would not lower our interest rate unless we were months late on payments and our credit already ruined. It'll be good to get a fresh start.

[motox]

my main concern would be if they said you have to move into the less expensive house and i am sorry but you cant keep your cars and your new home,,, is that possible if i am current on all of them? and if it does happen would i know before everything is done so i can not file and keep my house?

[FreshLikeADaisy]

Motox, I don't know anything about your houses and why you might be living in one and not the other, but I haven't ever heard of anyone making you move. That said, however, a trustee or court could technically refuse to allow you to reaffirm your mortgage on the house you prefer to live in, if they felt it was beyond your means and even with Ch7 you'd be unable to pay it.

To answer your other concern, it is very important that you remain current on every debt you want to keep (reaffirm): you say you want to keep your cars and the one house, so make absolutely certain the payments on those do not fall behind.

Once you have filed for Chapter 7, if you decide you don't want to go through with it you can file a Petition for Voluntary Dismissal, which is basically asking the court to let you drop it. But it's better for you to consult with attorneys upfront and decide that it's really best for you before filing -- better safe than sorry. I think an attorney could very easily tell you upfront what you can keep and what you will likely lose. It's all about the numbers, and the exemptions are pretty clear cut, so it's not the guessing game you might imagine. Good luck!

[motox]

the reason i am in the new one and not the old one is that funny enough the old one was next door to the inlaws and was a big fixer upper and the combination of a money pit and then inlaws made me move.. so i was renting it out hoping to keep it but the combination of bad renters and other things left me with too much stress to deal with.. and that was my main concern about filing is making sure that i could stay where i am.. there is just something about lawyers that make me uneasy so i hear what they say and it very well could be true but i always wonder

[FreshLikeADaisy]

Nope, you're right to be wary of lawyers. There are many good ones, but there are some really bad ones too. Your best bet is to educate yourself on bankruptcy first -- read through this forum, read the books, etc -- and then sign up for a free consult with as many attorneys as you'd like that offer them. If you educate yourself on it first, you'll have a very good sense of what to expect in terms of how the exemption process works. You can even check out your state's exemptions yourself. If you have assets you want to keep, you are going to want to retain an attorney if you can, but you don't have to go in there without a clue either. Educate yourself! Good luck!


P.S. Check out the stickies on this forum (the posts at the top that don't move) because they will give you great basic information, and definitely think about buying the books mentioned... that's a great place to start.

[yoyoma51]

motox-

We are able to keeps lots of valuable property including:

-Our home (not paid for, $116,000 mortgage)
-2001 Volvo S60 2.4T (paid for)
-2004 Ford Taurus SE (paid for)
-2005 50cc Moped (paid for)

And lots of other stuff. Thanks to the federal wildcard exemption, we're losing nothing but some pride.

I'm not saying there is a Santa Claus, but it isn't too bad, either.

[motox]

and the only reason i am able to file a chapter 7 is because i am in sales and my income in the winter time is alot lower... does that sound correct? i would think that they would look deeper into then just 6 months of pay

[yoyoma51]

Yes, 6 months pay is all the look at to determine if you fall under your state's median. However, the also look at your taxes for the last two years.

Finally, do you expect to have a large increase in before your case is closed or shortly after? If so, that may be an issue.

[motox]

yes there will be a big increase probably before it is discharged... And does anyone know since i am letting a house go that has renters in it i know i cant collect anymore money but do i legally have to send them a eviction notice.. i dont care if they stay since i am not paying for it anymore but courious of the legalitys of it..