Fraudulent Transfers and Assets Questions

[Mostage]

I am in the process of filing chapter 7 with one of the best and most experienced attornies in my state; however, I can't get an answer from him accurately...and mostly because I am afraid to disclose some of my assets and I want to be careful to not be falling under anything fraudulent. But, I don't want to lose some of what I have.

One of my debtors is a musicical equipment store credit card and I purchased a guitar amp and a guitar from there. I am an active musician and quite obviously don't want to have to forfiet my equipment upon filing chapter 7. They will look into this and ask where the equipment is and my original plan was to ask my friend to hold it. I'm not sure what to expect of the trustee...whether or not he'll(she'll) come investigate my home, for example.

Another one is a loan I got for a flatbed trailer that I purchased to haul a sport utility vehicle that I owned, but sold last year. I still have the trailer, and if I have to move to another residence, it will come in handy. How should I go about this one as well?

Should I claim any of these assets and will the trustee be forced to seize these in the attempt to put towards my debts? This whole thing was brought forth by an unfortunate job loss that happened while I was trying to build a new home (of which I lost $25,000.00 of my own out-of-pocket cash in a forclosure...LOOONG story, but I got really screwed) and I am in the process of rebuilding my stature, but in the process I have lawsuits from debts and I need to start over - to a point!

I am trying to start a musical career and really can't lose my equipment. But I also won't be able to provide proof of sale except for a quickly made, pre-dated document signed by my friend. Could I claim trying to play music as a career? I'm a little way off from making it huge, and live shows aren't that frequent yet.

I could say I sold the trailer with the Rhino I had, but they may go to the buyer and even though he could be hard to find, I don't know him well enough to vouch for me.

That's it. I appreciate any help. I'm not into trying to cheat the system, but these are items I need and have no way of recovering anytime soon, especially since I worked so hard to get them as it is!

Thanks,

M

[ichb]

You are required by law to list every asset and every creditor (the person who owes the money is the debtor) for a bankruptcy filing regardless of whether it is chapter 7 or chapter 13.

Your attorney is probably not answering your questions because he/she does not wish to be a party to any fraudulent activity.

There are exemptions for business related tools but they vary by state. I suggest you keep reading and check out some additional websites to learn all you can about filing bankruptcy and especially in your state.

[soleprop]

word. you can likely keep the musical instruments as 'tools of your trade' under federal or state exemptions (check the amounts against the values of your eq) if you at all consider yourself a musician by trade. my example to relate is this: i sew, my small business involved my sewing for profit. my business tanked and i'm now working a dayjob to pay bills, but i still consider myself a seamstress and pick up work on the side when i can - so i'll be listing my sewing machines (4 of them) + all sewing notions/implements as exempt under 'tools of my trade.' if i have to make a case for it i'm more than prepared. but you see, it is a defendable position, whereas a fraudulent hiding of your assets is not..

try to stuff the trailer under an exemption if you can; if you can't but you're adamant that you get to keep it, consider offering the trustee some otherwise exempted assets in exchange for being allowed to keep these that you're concerned with. the NOLO book says it's an option...

[Mostage]

So, does it look like I could end up keeping them? What sucks is I bought this guitar to give to my son as an heirloom too. It was custom made and has both of our initials on it. I suppose the trailer could be not such a big worry, but when you list assets, what kinds of arguments can you make to try and keep them? I know that I can sign a document that says I'll make the payments, I guess. Kinda like my wife's engagement ring and my leased truck.

I appreciate the feedback.

[soleprop]

my take on it is this: the exemptions are kinda like a bucket, and your assets are kinda like water. if you have more water than fits in the bucket, some falls out.

assets are to be valued at replacement/used value. i.e. if you go to ebay and look up the trailer or musical instrument and see what completed auctions for similar items have been bid up to, this is a valid value to assign to your asset. so if you spent $5k on a guitar at the store, and it is now going for $2k on ebay, that's the value you put on your schedule C form.

the federal exemptions include a wildcard exemption, for $1,075 against any asset you want to keep that does not already get covered under another exemption.

additionally, the federal exemptions include up to $10,125 of unused homestead exemption amount for any property - so if you haven't used all of that exemption up with your real property assets, you can use that.

so nutshell: cover the first $525 of the musical instrument under the personal property exemption. then cover the next $1,075 with the first wildcard i mentioned. then if there's more value to the asset you're worried about, cover the remaining value with the homestead exemption if possible.

note that this information makes the assumption that you can use the federal exemptions.

[PaKettle]

You should come clean with your attorney and he should be able to tell you if anyof these things can be exempted in any way.

If not, you may have to let them go. How much is the guitar worth? What is the used sale value of it? I would think you should be able to exempt it somehow... As to the trailer, maybe not... Depends on your state. But if I were you I'd come clean with the attorney and ask if there are any methods of legal exemption of any of these things.

You do NOT want to be caught committing bankruptcy fraud, it would be really bad news.

[keepmine]

Tools of the trade and exemptions for personal property vary by state.
This sort of stuff is easily replaced post bk. Your lawyer can't help unless he knows all of the details. Tell him the truth and whatever happens-happens. This is not worth risking your discharge over.
Plus, it's really weak to ask a friend to be a party to fraud. This is your deal-don't involve others.

[Mostage]

Well, that makes a lot of sense. See, I don't own a house anymore and I actually just have just a lifetime of accumilated items, from old old stereo equipment, assorted tools, some old furniture, books, I mean, it would take tons of paperwork and weeks to itemize EVERYTHING!!! I really don't have anything worth more than my $1800 guitar! Well, my truck, but that's a lease and I need it for work.

And, yes...I agree about not wanting to get myself into anything fraudulent. I've lived pretty honestly all my life, but like many have been dealt a bad card and have to suck it in and just begin again. Fricken sucks, that's for sure! But this was the best option besides getting wages garnished from lawsuits caused from debts.

[JRScott]

Come clean with your lawyer. He can help you.

You do not have to itemize everything. You basically just take general value in broad categories like jewelry, electronics, etc. Your lawyer can help you through this.

You wouldn't loose your truck so long as you can still afford the lease, its not technically yours .

Depending on your state you probably could cover the guitar too. Just come clean with the lawyer put it all on the table and let him help you.

[Flamingo]

You'd be surprised what you probably will be able to keep/exempt. I thought for sure we would have an issue as to our piano but we found out they are exempt in our State. Always be honest with your attorney. If you should hide something and it comes up later, it puts you and your attorney in a bad spot and can create all sorts of issues. Your attorney is tops in his field because he is good at what he does and probably avoids the fraud issues, as it appears he is trying to do here. However, it is he who should be advising you so confront him directly for an answer so you get the correct information for your case.

More and more trustees are snooping further as to hidden assets and fraud; some recent postings in this forum reveal that. Trustees are not stupid - they know all the tricks and can easily have something investigated by their staff if they suspect something. Why take that chance?

[AngelinaCatHub]

I'm the last to comment on this stuff being in trouble for not declaring a mortgage note we owned. That being said, I do blame a lot on our attorney as she knew of the note while preparing to file in Chapter 13 and I sold it at a great loss to pay bills and utilities.

You have to look very well to find any attorney that wishes to help you. I cannot talk to mine and she blows off at us for her not doing her job. It took 18 months to get this thing filed. We never filed 13. When my wife lost her job, we were forced into 7 and now are under investigation Rule 2004(b).

About your trailer: You mentioned amplifiers. How do you move them from gig to gig? Getting your equipment to your employment is a tool of the trade. Only my weak opinion as I too am learning by hard knocks.

[MomIcantFindmy]

The other thing to think about here is that if you have more assets than your exemptions you can itemize the cost and them make a plan with the court to pay for those. (So if your allowed $1K for musical instruments and yours are worth $2K, you make a plan to pay the court 1 K over the course of a set time...1 year or so). I would be so scared of getting caught doing the fraud thing.......not worth it.

[Mostage]

Well, I have tons of various trinkets, old stereo equipment (circa late 1970's), don't own a house anymore, my high value assets are actually classified under "debts", even my bedroom set and such are way out of date and I can't find any "market values" of these items anymore, so I'm not sure about itemizing. I was told to not worry about being too detailed, yet the itemizing sheet asks about coffee tables, and such (of which may be worth $40.00) as well as clothing. I mean, how am I supposed to respond to that line item? I have collected over the years pants and shirts, don't have any "designer" clothing, but I don't know what to put here.

Basically, I am bringing everything out to my lawyer, but I'm barely scraping the money up for the retainer and with every little question I ask him it goes more towards the retainer and I just want to get as many answers as I can to make sure I cover everything. Anyway, I certainly appreciate all input here. I'm afraid of losing those certain things, so it's tough. Not to mention my assets aren't very valuable. Nothing worth more than $2K, with the exception of my truck, of which is a lease and I believe is classified as debt.

The other thing I have is a self-built PC that I bought just after my divorce in '05. It could be worth $1,300.00 right now, but I also have a laptop that my employer owns, and my wife has a laptop that belongs to her school until she completes it in a couple years. That being said, is there any way that the computer used for all personal banking, etc can be taken away or sold? They can't touch my work computer, nor my wife's school computer because they don't belong to us. (which brings up the question, do we need to show those in our possession as well with ownership explained??) My EX-wife and I had a computer and in the divorce papers it shows her taking it, so I was thinking of protecting mine by saying its the one my ex-wife took in the divorce. Even though she's upgraded to a new laptop. I'm just not too sure how to approach this one! HELP! Oh, and my state is Arizona. PS I'm living in the house my ex-wife owns so I pay her rent and there are things here that she can claim to own, which of course she does in truth own, but those things are here as storage or as a furnished rental. Make sense?

And as far as any trustee inspection, how do those work? Do they show up randomly on your doorstep when you least expect it or does my attorney learn of a possible encounter and call to schedule it?

Thanks again.

[Mostage]

Well, I have tons of various trinkets, old stereo equipment (circa late 1970's), don't own a house anymore, my high value assets are actually classified under "debts", even my bedroom set and such are way out of date and I can't find any "market values" of these items anymore, so I'm not sure about itemizing. I was told to not worry about being too detailed, yet the itemizing sheet asks about coffee tables, and such (of which may be worth $40.00) as well as clothing. I mean, how am I supposed to respond to that line item? I have collected over the years pants and shirts, don't have any "designer" clothing, but I don't know what to put here.

Basically, I am bringing everything out to my lawyer, but I'm barely scraping the money up for the retainer and with every little question I ask him it goes more towards the retainer and I just want to get as many answers as I can to make sure I cover everything. Anyway, I certainly appreciate all input here. I'm afraid of losing those certain things, so it's tough. Not to mention my assets aren't very valuable. Nothing worth more than $2K, with the exception of my truck, of which is a lease and I believe is classified as debt.

The other thing I have is a self-built PC that I bought just after my divorce in '05. It could be worth $1,300.00 right now, but I also have a laptop that my employer owns, and my wife has a laptop that belongs to her school until she completes it in a couple years. That being said, is there any way that the computer used for all personal banking, etc can be taken away or sold? They can't touch my work computer, nor my wife's school computer because they don't belong to us. (which brings up the question, do we need to show those in our possession as well with ownership explained??) My EX-wife and I had a computer and in the divorce papers it shows her taking it, so I was thinking of protecting mine by saying its the one my ex-wife took in the divorce. Even though she's upgraded to a new laptop. I'm just not too sure how to approach this one! HELP! Oh, and my state is Arizona. PS I'm living in the house my ex-wife owns so I pay her rent and there are things here that she can claim to own, which of course she does in truth own, but those things are here as storage or as a furnished rental. Make sense?

And as far as any trustee inspection, how do those work? Do they show up randomly on your doorstep when you least expect it or does my attorney learn of a possible encounter and call to schedule it?

Thanks again.

[Mostage]

So, can anyone answer about the Trustee thing? About inspections and such?

I still need help regarding the assets. Can home PC's be exempt somehow in my state? That's really the only questions that need answered before I can finish up my paperwork.

Thanks for the help again, and sorry about double posting the last one! I had one of those moments where the post didn't seem to go through.