Our Upcoming Bankruptcy in Utah: Greets and Questions

[MichaelInUT]

Hi everyone! I'm new here, and thought I may as well introduce myself and my situation in this thread Sorry in advance for the length!

My wife and I haven't filed yet, but we met with our BK atty near the end of last year. She will cost us $950, and so far appears to be competent. She advised us to wait until after we got / spent our tax returns to file. We already received it all (about $5k) and will file right after we finish spending it (home repairs, paying this month's mortgage, fixing up my car, etc). She acted as though this would be an easy BK.

Quick details: Mostly CC and car debt, about $30k. That seems like a small amount compared to some other stories here; perhaps that's why the atty feels this will be easy. Our home and vehicles are our only real assets. We're giving up the wife's rather upside-down '05 Pontiac Grand Am (it's been a good car, but that's $8k+ of luxury loan we don't need and can't pay), keeping my owned outright '98 Oldsmobile LSS (falls well inside the $5k total car value allowed in UT). Our home has less than $17k equity, so we're allowed to exempt that. She has some student loans in deferment, and one of us will hopefully be able to find another job before we need to start paying those again.

My wife is all nerves and tension. She's never gone without a credit card in her life. By contrast, I never even had one before we got together. I declared BK about 9 years ago in NY due to medical bills, and have been reassuring her that it will be a good thing for us in the long run. Our lifestyle can't be what it used to, when she had a good job and we didn't have our little one to tend to at home. I'm just so thankful we managed to acquire a decent car and nice home before our finances and the economy went completely to heck. This should give us a fresh start so we can hold on to those important things.

I had some questions to put here, then searched around the forum a bit and pretty much all are answered now. I'm sure I'll have more soon, though! So for right now I'll just say this looks like a very helpful place... I'm glad I found it. Now more than ever I think everyone should only buy what they have real cash money to pay for, except perhaps your home. I hope this economy turns around soon, because it's pretty disillusioning not being able to get a job even at K-mart

Oh, and if anyone can give some reassurances for my freaking-out wife, they are most welcome, thanks!

[Trixie007]

Hello, and welcome to the forum! Glad you're getting the answers to your questions. I'm in the same boat, sort of, just got my tax refund yesterday, now I'm off to spend! I find the thought of that exhausting!

To your DW, this can be one of the most empowering time in your life! Perfect time to start focusing all your energy of the things that mean the most to you. This economy is so uncertain, and I think it would be harder and a longer road for those of us here to overcome our financial difficulties any other way, because we're all being hit from so many angles. At least with a fresh start you will be on a more even playing field. Best wishes to both of you.

[Flamingo]

As to your "freaking out" wife...tell her it is totally normal to freak out prior to filing for anyone! She may be freaking out due to the upcoming lifestyle change you will both encounter and if that is the case, tell her to take a look around her at this economy and what having an overload of credit and bills can do to a family if something happens to rock the boat. Most of the time all it takes is a job or income loss and then it all falls down. You both need to stay at a place where if an income or job loss occurs again, you will not have any high debt to worry about. So many people file and then when discharged go right back to where they were before and wonder why they end up filing again in several years. I so often state on here a phrase I read in a fairly recent financial article about credit cards and a great description to remember to any future use of credit cards..."A credit card is a snake in your pocket."

Best of luck to you both and welcome aboard!

[outsidetool]

Hi MichaelInUT,
I'm also in Utah, filed Oct 2008; got a discharge and just waiting to finish up taxes and get this thing closed. You mentioned that your atty was costing $950? Is that for a Ch 7? I paid $2000 for a Ch 7, which did include cost of credit counseling and filing. A Ch 13 would have cost around $1000 to start. So was just curious of what Chapter you're filing.

[MichaelInUT]

Hi MichaelInUT,
I'm also in Utah, filed Oct 2008; got a discharge and just waiting to finish up taxes and get this thing closed. You mentioned that your atty was costing $950? Is that for a Ch 7? I paid $2000 for a Ch 7, which did include cost of credit counseling and filing. A Ch 13 would have cost around $1000 to start. So was just curious of what Chapter you're filing.

Yes, the lawyer costs $950 (half due at filing, half 30-40 days after- though we'll just pay it all up front). We're filing Chapter 7, so that will cost another $299. The credit counseling is $30 (and all done online). Altogether it will be $1,279. We weren't exactly shopping around for a bargain, but it looks like we found one

[outsidetool]

Yes, the lawyer costs $950 (half due at filing, half 30-40 days after- though we'll just pay it all up front). We're filing Chapter 7, so that will cost another $299. The credit counseling is $30 (and all done online). Altogether it will be $1,279. We weren't exactly shopping around for a bargain, but it looks like we found one

Yeah, then that's probably a decent price, especially if the atty thinks it will be pretty simple and to the point--mine had a few issues going on (and still does--discharged but not closed yet).
So, good luck with it all.

[nervousss]

A word of advice for nerves (based on my experience): Perhaps don't direct your wife to these forums until after your 341 meeting. Obviously, forward her to information sources and encourage her to get educated in what you are about to do so she doesn't feel like she doesn't know what's going on, but don't show her the "bad" experience stories.

I also have a very simple case, and got myself worked up into an absolute wreck before my 341, and in the end the trustee asked me the standard two minutes of questions and then sent me on my way. My attorney told me it would be simple, but I was so paranoid after reading about fraud and dismissals!

Thoughts to share with her based on someone that just had her 341: It was totally painless, especially compared to the other complicated cases I watched before mine. As long as you guys are honest and lay it all out for your trustee to see, you should be fine. The people that got ripped to shreads were the people trying to hide things from the trustee. They can smell hidden assets 12 states away!

You obviously don't have to follow my advice, and maybe I'm not even right... but reading the horror stories made my anxiety go up 10 fold.

[JRScott]

Good Luck to you. It is normal to be apprehensive about bankruptcy, however at least before the larger economic troubles most folks returned to the same level or credit within a couple of years.

I would however see 2-3 more lawyers even if you've set your heart on this one. It's always good to see a few even if you do settle on the first.

[MichaelInUT]

Ok, here's a question! Again sorry about the length, I babble.

We use a laptop at home- for job searching, working on our resumes, my wife's online surveys (about $20/mo), bill management, upkeeping my work's website, and soon my wife hopes to try some bookkeeping. We bought a Gateway three or four years ago, and I've had my hands full keeping it running. Bad power cords, the power jack breaking constantly, mouse buttons no longer working, and finally a hinge completely snapped off last week. I've been in IT for decades, and this really takes the cake for bad design.

So we shopped around for the absolutely lowest price new computer. We found quite a deal on an Acer at Best Buy, of all places (I know, seriously... it was more expensive online!). It was $449 plus tax, so $480.81. I found someone who wants our defunct Gateway for parts that will pay $200. That leaves a balance of about $280 we've spent on something not home improvement or auto repair related. Will this asset end up needing to be liquidated, or what are the chances we can keep it when we file Chapter 7 this month?

[Flamingo]

Ok, here's a question! Again sorry about the length, I babble.

We use a laptop at home- for job searching, working on our resumes, my wife's online surveys (about $20/mo), bill management, upkeeping my work's website, and soon my wife hopes to try some bookkeeping. We bought a Gateway three or four years ago, and I've had my hands full keeping it running. Bad power cords, the power jack breaking constantly, mouse buttons no longer working, and finally a hinge completely snapped off last week. I've been in IT for decades, and this really takes the cake for bad design.

So we shopped around for the absolutely lowest price new computer. We found quite a deal on an Acer at Best Buy, of all places (I know, seriously... it was more expensive online!). It was $449 plus tax, so $480.81. I found someone who wants our defunct Gateway for parts that will pay $200. That leaves a balance of about $280 we've spent on something not home improvement or auto repair related. Will this asset end up needing to be liquidated, or what are the chances we can keep it when we file Chapter 7 this month?

Did you ask your attorney before you made the purchase? Whenever you retain an attorney, financial related items affecting information you have already provided to him/her needs to be passed by the attorney before any financial move is made. It appears from your first posting you have retained her and then you state you are filing this month.

[outsidetool]

While I do agree that the 'final word' on your computer dilemma hangs with your attorney, it would seem unlikely to me that a $500 computer is going to be something worthy of liquidating. I know when I filed last Oct (also, recall, in Utah) we had a few computers around the house. The most notable was a Dell that was financed about a year ago for $1400. On my paperwork for the atty, I originally put the computer down as being worth $500; my atty asked "oh, really?" You think you can take that to the pawnshop and get $500? Quickly, it became valued at like $150 bucks. I don't know if that made it some exempted item or whatever, I just know that there was never a question or issue over it. I can't imagine that your Acer would be much different, even though you're purchasing it more recently. But, yes, I discern the fine lines with your atty at the time you submit paperwork and sign the filing papers.

[JRScott]

Used value on a new laptop acer is probably 100-150 dollars. That's what you might get if you took it into. Not sure of Utah exemptions but so long as it fits in an category and you exempt its value should be okay, your attorney should be able to help you.