Chapter 7 question - sticky wicket!

[browneyes]

Thanks for a wealth of information on this forum! Everyone here is so supportive!

My husband and I are considering as an absolute last resort filing chapter 7. I think most of our assets would be exempted and we would be free from the credit card hell we are living. We haven't used them in almost a year anyway and I embrace living a cash only life. I just can't keep up with my payments and we have already tried debt management.

However, I own a separate parcel with some siblings that we inherited years ago. My husband is not on the parcel. How would this be handled? I have a minority interest, only 20%, and based on the assessed value, my share is only about $13,000. Can I include this in my personal exemptions if I have any wiggle room?

If you have any thoughts, please share!

Thanks

[Tbornetun]

If you have a wildcard exemption you have room in, I think so. I don't think there will be any problem.

[FloridaGuy]

Unless I am mistaken... another option from the trustee if you are over the exemption is to actually buy it back from the court/trustee. We were turned into an asset case when the trustee discovered some stock that was left to my wife about 12 years ago, from our tax returns. Although we knew we had it, we had no idea of value, etc. We disclosed in the petition the annual dividend... then she inquired for more details.

It took a while to discover it, but found out it had a value of about 16,000. Since it was only in my wifes name... only her exemptions could protect it. Here in Florida... thats $5K, and the trustee states $4K... so he have to have a hearing.

She sent a rude letter asking what the intentions were, as it was "obvious" the debtors (us) would not have the income to buy it back.

So it really depends on the trustee, etc. In your case... since family members own the other portions, you may have several options. Hopefully it will go well for you

[lrprn]

Depending on the value of your 20% of the current value of the property, if that 20% amount cannot be completely protected by your state's bankruptcy exemptions, then it could place the property at risk if you file Ch 7.

If the property's current value is high enough, your trustee could seize the property for sale, then after the sale give your siblings their 80% of the sale price and keep your 20% to pay off creditors. Have you had the property appraised recently? How much is it worth in today's market?

If you haven't set up free or low cost initial consultations with 3-4 experienced bk lawyers in your area, now is the time to do so. With this property in the mix of your assets, you don't want to make any mistakes trying to file this Ch 7 on your own without legal advice.