Stock question

[cj0203]

Hey all

Another post got me thinking. My husband got 5000 shares of his (private) company stock when he got hired in December. WE didn't list it at our original consult with the atty because he hadn't actually GOTTEN the papers saying it was his yet. Well he got the papers last month.

We have NO idea if it's even worth anything. I do know he can't "use" it for like 5years or something. So what do we do? Just tell the atty about it and give them a copy of the papers and let them figure it out?

[getouttadebt]

Tell your attorney. I have a grant of 3,000 shares in a public company. These shares were granted in 2004. By the time I filed in Jan 2008, I had exercised and sold 2,500 shares. I didn't list the other 500 unvested shares anywhere on my paperwork, nor did I mention it to my attorney. It came up in my 341 meeting. It wasn't a big deal because I still had room on my Wildcard list of exemptions and I was still declared a no asset case -- but the Trustee did ask my attorney to file an ammendment stating the value of the vested and unvested options.

Good luck,
getouttadebt

[HHM]

Stocks are assets like any other financial asset, so yes, you must list the stock on your petition.

For private, non-traded companies, you are usually fine to list the value as unknown, or use what ever par value the stock actually has, if any. Most trustees are not interested in private stock because there is no market for the shares, so it is not as if they can do anything with them. Also, when you list the asset, you also want to point out that the stock is restricted.

[BKFLA]

What if the stocks are with a VERY large company? My brother in law has A LOT of stocks in an airline company and thinks that he can keep it....is that true? He is also an employee with the company.

[One Half Full]

I'll bet this is one of those things where the rules are different in every state. I was asked about stock. I used to have some but sod it to pay my med bills. When I said, I already sold it 2 years ago, the lawyer said "good." Don't know what that means. Maybe it just meant less paperwork for her.

[HHM]

What if the stocks are with a VERY large company? My brother in law has A LOT of stocks in an airline company and thinks that he can keep it....is that true? He is also an employee with the company.

The operative difference is between publicly traded and private companies. I am guessing that this airline is publicly traded, if so, unless the state has an exemption, the stock is toast (i.e. will be taken by the trustee).

[epiphany]

I forgot about some stock to the tune of 7500 that I have when I talked to my lawyer because I never touch it. My brother bought some years ago and he and has power of attorney over it but it's in my name.

As soon as I realized that I had completely overlooked it, I called my attorney and he said it was no problem because my expemptions will cover it.

Regardless, you need to find out what your stock is worth TODAY and talk to your lawyer. Only your attorney will know whether or not you will be able to exempt it or not depending on your own situation.

Good Luck,

EP

[epiphany]

I'll bet this is one of those things where the rules are different in every state. I was asked about stock. I used to have some but sod it to pay my med bills. When I said, I already sold it 2 years ago, the lawyer said "good." Don't know what that means. Maybe it just meant less paperwork for her.

Hahaha, one half...you are probably right.

EP

[cj0203]

Thanks guys. I'll just give her the paperwork they gave us; honestly I don't even think the stock is WORTH anything; the company just started making a profit last year and it's still private. (it's a very small company)

[BKFLA]

The operative difference is between publicly traded and private companies. I am guessing that this airline is publicly traded, if so, unless the state has an exemption, the stock is toast (i.e. will be taken by the trustee).

It's in Nevada. He seems to think that he can keep it so maybe there is a wild card for that or something? It is publicly traded and I'm sure a lot in $$ in the stocks. Maybe his lawyer is an idiot too though. He told him that he could keep everything he has and even a couple of his credit cards to help rebuild credit....does that seem right? Sorry to threadjack cj0203......

[HHM]

It's in Nevada. He seems to think that he can keep it so maybe there is a wild card for that or something? It is publicly traded and I'm sure a lot in $$ in the stocks. Maybe his lawyer is an idiot too though. He told him that he could keep everything he has and even a couple of his credit cards to help rebuild credit....does that seem right? Sorry to threadjack cj0203......

If the stock is held in an IRA, 401K, or someother type of retirement vehicle, or is restricted because he is an employee of the airline, then it would probably be protected, but if the stock is just sitting in a private brokerage account, it is an asset. I do not think NV has a wild card or cash exemption.

[cj0203]

Hey, I have another question about this. I read thru the paperwork and it looks like it's actually not that he GOT 5000 shares, but that he has the option to BUY 5000 shares at a discount for the next 10 years. I assume this means there's absolutely no point in mentioning it to the atty since he doesn't actually HAVE the stock?

Thanks!

[HHM]

Hey, I have another question about this. I read thru the paperwork and it looks like it's actually not that he GOT 5000 shares, but that he has the option to BUY 5000 shares at a discount for the next 10 years. I assume this means there's absolutely no point in mentioning it to the atty since he doesn't actually HAVE the stock?

Thanks!

You still need to mention it to your attorney. You don't want to keep things from your attorney. More BK's go awry because the debtor was not forthcoming with their attorney than for any other reason.

Let's get some clarification on the facts:
1. Does this "friend" work for, or did he work for, the company for which he has the option.
2. What type of instrument is giving him the "option"

[cj0203]

You still need to mention it to your attorney. You don't want to keep things from your attorney. More BK's go awry because the debtor was not forthcoming with their attorney than for any other reason.

Let's get some clarification on the facts:
1. Does this "friend" work for, or did he work for, the company for which he has the option.
2. What type of instrument is giving him the "option"

lol, it's my husband not a "friend". he currently works for the company, and he has a document saying he has the option to buy 5000 shares of company stock at .10/share until 2018. Right now it's a private company.

[danaf]

That's a good deal/risk if it's a good company and they go public. Definately ask your attorney about this. And also find out when the last possible date he has to take this option.