Assets and Chapter 7

[TJR70]

So my lawyer said all my items and even my income tax was proctected. Since I've been reading these post it seems like its up to the trustee. I am in WA if that makes any difference and we don't own a house.

[MovintoOKC]

New to the BK world as well as the 'forums'. In excess of 55k in debt. 6 mths ago displaced from the mortgage industry, not able to pay bills. Movin to OKC in April. Wife 14 mths into a MS diagnosis, just today had 3rd MRI, as well as Spinal tap, meds, lost days from being dibilitated!!! Another reason for the move, to be closer to family. I'd like to read through all of these threads and plan to do as much as possible, though there's a level of retention with a mental disorder I possess that prevents me from being thorough. Here's my Q........ I've had an EX spouse that owes me a 100k disbursement from previous house {of which I'm still on that loan} she's 90+ days late in paying, we're in court for a 3rd time on the 30th....... If I file, and the creditors get wiped away, excluding that residence......... then in 60 /90 /120 days I finally receive that financial infusion, is it used to pay debts or is it for a new beginnig? Thx in advance for any assist!

[HHM]

That sort of issue would be an ASSET in your BK estate. Your claim to it already exists, so it doesn't matter when you actually receive it, it is part of your BK. You need to wait until you receive those funds before filing and figure out how to spend and exempt them.

[Vanda]

Assets and Chapter 7 questions

I am in Chapter 7 and the trustee is objecting to my exemptions saying my assets are more than the $1000 personal and $1000 auto allowed in FL. I complied with document production, and after that they declared it moot stating again the objection to exemptions. Now, a week later, I am waiting and wondering what to do, I owe the IRS back taxes but don't want to pay them yet because the Trustee wants my entire tax refund, car has another recall and needs servicing but I don't want to do that either if they are going to ask for the car back. The paralegal expects them to come up with some sort of settlement agreement, in order words they will want cash from me. I didn't know Chapter 7 had any wiggle room like this - I thought it was either discharge or convert to Chapter 13. If they want cash, can I borrow it from my 401K? I am longing to get this over with.

[Bankruptcy20]

HHM, you wrote:

"If you have Non exempt assets, you have 5 choices.
1. Before you file BK, sell the asset and spend the money. (there are caveats to this option, you must sell the asset for quick-sale, Fair market value, and you need to spend the money reasonably, i.e. necessary living expenses).
2. Before you file BK, Borrow against the asset and spend the money. (same caveats as for option 1).
3. File Chapter 7 and surrender the asset
4. File Chapter 7 and redeem the asset from the trustee (i.e. buy the asset back from the trustee.)
5. File Chapter 13 and retain the asset. "

Isn't there a sixth scenario, that you "File Chapter 7, keep the asset, but forgo any future income from such asset"?

There was an earlier question above that wasn't answered, but I'm thinking about an illiquid, limited partnership. Many times they cannot be sold (either reasonably for a good price, or because the partnership documents just outright prevent it). The trustee may or may not try to seize and sell it (unclear whether they can even do this per the code). But, wouldn't the trustee just try to seize any future capital distributions from it? Seems the logical next step for a restricted, LP stake.

Anyone have any experience with this?

I guess you could borrow against the future income before BK, spend it for living expenses, and claim the LP interest as an asset, and a secured loan against that LP asset (per HHM's #2 above). But, has anyone tried this? Seems a bit complicated, and I wouldn't even know who to approach for such a structured loan.

[HHM]

Future income is not usually an asset of the BK (annuity type income being the exception). Asset values are set at the time your case is filed. But, the trustee only has a liquidation right.

[Bankruptcy20]

In the case of an investment fund that the debtor (who is a passive, minority limited partner) or trustee cannot readily liquidate (due to lack of a secondary market, or because the fund documents prevent bankruptcy sales or other voluntary sales to avoid harming other LPs), I thought the trustee can impose a lien on future distributions in lieu of seizing the asset. The income is not guaranteed, so it's not a traditional "annuity".

Am I wrong? That's what I gathered on the various posts on limited partnerships but the comments were not conclusive, which is why I'm moving to this sticky thread...

[cutloose]

Buy assest?

Our small business has started the process to file for Chapter 7. Can we start a new company and buy the assets of the original company. It is construction equip that we would continue to use. 90% of the debt the company has is unsecured but the equipment is owned. How can we set up a payment plan for the new company to pay the old for this equip??

[HHM]

Our small business has started the process to file for Chapter 7. Can we start a new company and buy the assets of the original company. It is construction equip that we would continue to use. 90% of the debt the company has is unsecured but the equipment is owned. How can we set up a payment plan for the new company to pay the old for this equip??

You won't be able to set up a payment plan unless it is really short, 6 months or less. Typically how this works is you are either able to get a loan to buy the equipment out of the BK estate, or you bring in a 3rd party who invests in the company and takes an ownership interest. You need to be careful here, these sort of New Company flips have issues and unless you have an attorney (actually a couple of attorney's), the creditors of the old company can sometimes go after the new company.

[alltappedout]

I just renegotiated my car loan balance of $2500; car is worth about $4700 (kelly blue book). Modified loan (not a new loan) payments are now an affordable $110/month instead of $368/mo. I understood that I could "reaffirm" this asset. Can anyone help me understand this? I'm in California and would be filing under ch7 and CA's system 2 exemptions. That would allow me $3300 for vehicle plus there is wildcard of $1100.
I have the Nolo book and am a newbie here on the forum. Any help would be appreciated.

[CH33 Paralegal]

Can anyone speak to a situation like this.

I am looking at Chapter 7 right now - loads of medical debt and credit card debt incurred because we were paying on the medical debt - blah, blah blah.

I make approximately 1/3 of my income as a staff musician for a church. My guitar collection has been assembled over three decades. All of my guitars are "players" instruments - none of them hang on a wall, if you know what I mean. However, some of them are now quite valuable, although that does not stop me from gigging with the regularly.

Is there a test for what constitutes a professional musician? How are instrument exemptions determined?

The main question is, am I going to lose my guitars?

Thank you

When you value your possessions, you value them in a liquidation environment, not a retail environment. The only reason the trustee wants to sell anything is because he wants to generate money for your unsecured creditors. An item is only worth what it can sell for.

When you list the possessions in your petition, you need to list that you possess guitars, but itemizing them in the petition is not necessary. It is the trustee's job to look into each debtor's schedules and determine if something can be sold.

Now if he decides to look into your guitars and sees something that he can move, he has every single right in the world to do it. In a CH7, there are NO GUARANTEES that you can keep anything.

There are federal exemptions and state exemptions that you can take advantage of and you may want to familiarize yourself with the exemptions that apply.

[overthedebt]

In a CH7, there are NO GUARANTEES that you can keep anything.

There are federal exemptions and state exemptions that you can take advantage of and you may want to familiarize yourself with the exemptions that apply.

I'm new to these forums so excuse my ignorance in asking.. does this mean the courts can come into your house and make it a big garage sale? I've been trying to read through all the information on Chapter 7 and I find conflicting information. Any input is appreciated. Thanks in advance!

[HHM]

I'm new to these forums so excuse my ignorance in asking.. does this mean the courts can come into your house and make it a big garage sale? I've been trying to read through all the information on Chapter 7 and I find conflicting information. Any input is appreciated. Thanks in advance!

Every state has exemptions for household items. 99% of the time, you are not going to lose your stuff. They don't send someone to your house to do an inventory.

[overthedebt]

Every state has exemptions for household items. 99% of the time, you are not going to lose your stuff. They don't send someone to your house to do an inventory.

Thanks for the response.

[FloridaFiler]

Getting ready to file 7 in SW Florida. Did up household inventory and my Atty. said that the Trustees in SW FL are having appraisers go out and verify inventory pricing, virtually 100% of the time.

Has anybody had any experience with this?

Is there any recourse if the asset priced by the appraiser is over the actual local market ( I did research on some items, i.e. E-Bay, antique dealers, Craig's list) and if so, what is my recourse?

Thank you all for helping me cope with this whole mess!

$85K unsecured cc debt, lost job 18 months ago, stopped using cc 9/08. Time to file